The immunosuppressive drugs FK506 and rapamycin bind to the cellular protein FKBP12, and the resulting FKBP12-drug complexes inhibit signal transduction. FKBP12 is a ubiquitous, highly conserved, abundant enzyme that catalyzes a rate-limiting step in protein folding: peptidyl-prolyl cis-trans isomerization. However, FKBP12 is dispensible for viability in both yeast and mice, and therefore does not play an essential role in protein folding. The functions of FKBP12 may involve interactions with a number of partner proteins, and a few proteins that interact with FKBP12 in the absence of FK506 or rapamycin have been identified, including the ryanodine receptor, aspartokinase, and the type II TGF-beta receptor; however, none of these are conserved from yeast to humans. To identify other targets and functions of FKBP12, we have screened for mutations that are synthetically lethal with an FKBP12 mutation in yeast. We find that mutations in HMO1, which encodes a high mobility group 1/2 homolog, are synthetically lethal with mutations in the yeast FPR1 gene encoding FKBP12. Deltahmo1 and Deltafpr1 mutants share two phenotypes: an increased rate of plasmid loss and slow growth. In addition, Hmo1p and FKBP12 physically interact in FKBP12 affinity chromatography experiments, and two-hybrid experiments suggest that FKBP12 regulates Hmo1p-Hmo1p or Hmo1p-DNA interactions. Because HMG1/2 proteins are conserved from yeast to humans, our findings suggest that FKBP12-HMG1/2 interactions could represent the first conserved function of FKBP12 other than mediating FK506 and rapamycin actions.