Sodium tolerance in yeast is disrupted by mutations in calcineurin, a Ca2+/calmodulin dependent protein phosphatase, which is required for modulation of Na+ uptake and efflux mechanisms, Five Na+-tolerant mutants were isolated by selecting for suppressors of calcineurin mutations, and mapped to the PMA1 gene, encoding the plasma membrane H+-ATPase, One mutant, pma1-alpha 4, which has the single amino acid change Glu(367) --> Lys at a highly conserved site within the catalytic domain of the ATPase, was analyzed in detail to determine the mechanism of Na+ tolerance. After exposure to Na+ in the culture medium, Na-22 influx in the pma1 mutant was reduced 2-fold relative to control, consistent with a similar decrease in ATPase activity, Efflux of Na-22 from intact cells was relatively unchanged in the pma1 mutant, However, selective permeabilization of the plasma membrane revealed that mutant cells retained up to 80% of intracellular Na+ within a slowly exchanging pool, We show that NHX1, a novel gene homologous to the mammalian NHE family of Na+/H+ exchangers, is required for Na+ sequestration in yeast and contributes to the Na+-tolerant phenotype of pma1-alpha 4.