The chitin synthase that makes the primary septum during cell division in budding yeasts is an important therapeutic target with an unknown activation mechanism. We previously found that the C2-domain of the Saccharomyces cerevisiae Inn1 protein plays an essential but uncharacterised role at the cleavage site during cytokinesis. By combining a novel degron allele of INN1 with a point mutation in the C2-domain, we screened for mutations in other genes that suppress the resulting defect in cell division. In this way, we identified 22 dominant mutations of CHS2 (chitin synthase II) that map to two neighbouring sites in the catalytic domain. Chs2 in isolated cell membranes is normally nearly inactive (unless protease treatment is used to bypass inhibition); however, the dominant suppressor allele Chs2-V377I has enhanced activity in vitro. We show that Inn1 associates with Chs2 in yeast cell extracts. It also interacts in a yeast two-hybrid assay with the N-terminal 65% of Chs2, which contains the catalytic domain. In addition to compensating for mutations in the Inn1 C2-domain, the dominant CHS2 alleles suppress cytokinesis defects produced by the lack of the Cyk3 protein. Our data support a model in which the C2-domain of Inn1 acts in conjunction with Cyk3 to regulate the catalytic domain of Chs2 during cytokinesis. These findings suggest novel approaches for developing future drugs against important fungal pathogens.