We report here that PHO2 protein is also phosphorylated by an unidentified protein kinase. A Ser-230 to Ala mutation in the consensus sequence (SPIK) recognized by cc2/CDC28-related kinase in the PHO2 protein led to the complete loss of its ability to activate the transcription of PHO5 gene. Further work showed that Pro-231 to Ser mutation inactivated PHO2 protein as well, while Ser-230 to Asp mutation did not affect PHO2 activity. Since PHO2 Asp-230 mutant mimics Ser-230 phosphorylated PHO2, we postulate that only phosphorylated PHO2 protein could activate the transcription of the PHO5 gene. The results of in vitro phospho-labelling experiments showed that the whole cell extract of the YPH499 strain grown under low phosphate conditions phosphorylated GST (glutathione S-transferase)- PHO2 (wild type) fusion protein, but not the GST-PHO2 mutant (Pro-231 to Ser) protein in which the putative phosphorylation sequence was destroyed. We therefore propose that the PHO2 protein may also be phosphorylated in vitro at Ser-230, and the phosphorylation of this site may be necessary for its function in controlling PHO5 gene expression.