The Sko1p transcriptional repressor regulates a subset of osmoinducible stress defense genes in Saccharomyces cerevisiae by binding to cAMP-responsive elements. We have reported previously that in response to stress Sko1p is phosphorylated by the stress-activated Hog1p mitogen-activated protein kinase, which disrupts its interaction with the Ssn6p x Tup1p corepressor. Here we report that other mechanisms are essential for the regulation of the Sko1p repressor activity upon stress. The nuclear localization of Sko1p depends on the stress-inhibited protein kinase A (PKA). Sko1p is localized in the nucleus of unstressed cells, and it redistributes to the cytosol upon severe salt stress (1 m NaCl). Yeast mutants with low PKA activity localize Sko1p to the cytoplasm in the absence of stress and exhibit deregulated expression of cAMP-responsive element-regulated genes. The central part (315) of Sko1p, containing the PKA phosphorylation sites and the basic domain-leucine zipper domain, is essential for its nuclear localization. Salt-induced export of Sko1p from the nucleus is independent of Hog1p and of the Bcy1p regulatory subunit of PKA. Furthermore, phosphorylation by PKA slightly enhanced DNA binding affinity of Sko1p in vitro, whereas Sko1p dimerization in vivo is not regulated by stress. Sko1p repressor activity is associated to its binding to the Ssn6p x Tup1p complex. Interestingly, the Sko1p NH(2) terminus (1), containing the Hog1p phosphorylation sites, associates in vivo with Tup1p in the absence of Ssn6p, suggesting that Sko1p represses gene transcription by interacting directly with the Tup1p subunit of the Ssn6p x Tup1p complex.