Substitution of Ala for Tyr713 in the C-terminal cytosolic tail of Kex2p disrupts a TGN localization signal (TLS), leading to default transport to the vacuole (Wilcox et al., 1992. Mol. Biol. Cell 3: 1353-1371). To identify genes involved in TGN localization, we isolated suppressors of the Y713A substitution using a mating assay based on the requirement for Kex2p in alpha factor synthesis. Suppressor mutations in three genes (SOI1-SOI3) were allele-specific: they suppressed the mislocalization phenotype of TLS point mutants but not TLS deletion mutants (Redding K. et al., submitted). soi1 mutants were defective for vacoular protein sorting and in localization of wildtype Kex2p. Alleles of soi1 and SOI2 were capable of suppressing an analogous TLS mutation in another TGN molecule, Ste13p. Alleles of SOI2 were dominant, suggesting that Soi2p may physically interact with the TLS. The SOI1 gene was cloned by complementation of a Spo- phenotype. It encoded a high molecular weight, hydrophilic protein that lacked obvious similarity to other known proteins and was devoid of recognizable motifs. The soi1*delta* strain exhibited defects in localization of three TGN transmembrane proteins, Kex2p, Ste13p and Vps10p, indicating that Soi1p plays a general role in the localization of transmembrane proteins to the TGN.