The K1 killer toxin of Saccharomyces cerevisiae is a secreted, virally-coded protein lethal to sensitive yeasts. Killer yeasts are immune to the toxin they produce. This killer system has been extensively examined from genetic and molecular perspectives. Here we review the biology of killer yeasts, and examine the synthesis and action of the protein toxin and the immunity component. We summarise the structure of the toxin precursor gene and its protein products, outline the proteolytic processing of the toxin subunits from the precursor, and their passage through the yeast secretory pathway. We then discuss the mode of action of the toxin, its lectin-like interaction with a cell wall glucan, and its probable role in forming channels in the yeast plasma membrane. In addition we describe models of how a toxin precursor species functions as the immunity component, probably by interfering with channel formation. We conclude with a review of the functional domains of the toxin structural gene as determined by site-directed mutagenesis. This work has identified regions associated with glucan binding, toxin activity, and immunity.