Wild type and eight point mutants of Saccharomyces cerevisiae ARF1 were expressed in yeast and bacteria to determine the roles of specific residues in in vivo and in vitro activities. Mutations at either Gly2 or Asp26 resulted in recessive loss of function. It was concluded that N-myristoylation is required for Arf action in cells but not for either nucleotide exchange or cofactor activities in vitro. Asp26 (homologous to Gly12 of p21ras) was essential for the binding of the activating nucleotide, guanosine 5'-3-O-(thio)triphosphate. This is in marked contrast to results obtained after mutagenesis of the homologous residue in p21ras or Gs alpha, and suggests a fundamental difference in the guanine nucleotide binding site of Arf with respect to these other GTP-binding proteins. Two dominant alleles were also identified, one activating dominant ([Q71L]Arf1) and the other ([N126I]) a negative dominant. A conditional allele, [W66R]Arf1, was characterized and shown to have approximately 300-fold lower specific activity in an in vitro Arf assay. Two high-copy suppressors of this conditional phenotype were cloned and sequenced. One of these suppressors, SFS4, was found to be identical to PBS2/HOG4, recently shown to encode a microtubule-associated protein kinase kinase in yeast.