We have determined that TPD3, a gene previously identified in a screen for mutants defective in tRNA biosynthesis, most likely encodes the A regulatory subunit of the major protein phosphatase 2A species in the yeast Saccharomyces cerevisiae. The predicted amino acid sequence of the product of TPD3 is highly homologous to the sequence of the mammalian A subunit of protein phosphatase 2A. In addition, antibodies raised against Tpd3p specifically precipitate a significant fraction of the protein phosphatase 2A activity in the cell, and extracts of tpd3 strains yield a different chromatographic profile of protein phosphatase 2A than do extracts of isogenic TPD3 strains. tpd3 deletion strains generally grow poorly and have at least two distinct phenotypes. At reduced temperatures, tpd3 strains appear to be defective in cytokinesis, since most cells become multibudded and multinucleate following a shift to 13-degrees-C. This is similar to the phenotype obtained by overexpression of the protein phosphatase 2A catalytic subunit or by loss of CdC55, a gene that encodes a protein with homology to a second regulatory subunit of protein phosphatase 2A. At elevated temperatures, tpd3 strains are defective in transcription by RNA polymerase III. Consistent with this in vivo phenotype, extracts of tpd3 strains fail to support in vitro transcription of tRNA genes, a defect that can be reversed by addition of either purified RNA polymerase III or TFIIIB. These results reinforce the notion that protein phosphatase 2A affects a variety of biological processes in the cell and provide an initial identification of critical substrates for this phosphatase.