In a search for mutants exhibiting altered activity of the yeast transcription factor, Mcm1, we have identified the SLN1 gene, whose product is highly related to bacterial two-component sensor-regulator proteins. sln1 alleles identified in our screen increased Mcm1p-mediated transcriptional activation, while deletion of the SLN1 locus severely reduced Mcm1p activity. Our data establish that Mcm1p is a downstream target of the Sln1 signaling pathway. Yeast Sln1p was recently shown to be involved in osmoregulation and to depend on the Hog1 MAP kinase (Maeda, T., Wurgler-Murphy, S., and Saito, H. (1994) Nature 369, 242-245). We show that SLN1-mediated regulation of Mcm1p activity is independent of the Hog1 MAP kinase, and suggest that the role of SLN1 is not restricted to osmoregulation.