Thioacylation is a reversible lipid modification of proteins that plays a role in the regulation of signal transduction. Acyl-protein thioesterase 1 (APT1) was identified as an enzyme capable of deacylating some thioacylated proteins in vitro. Saccharomyces cerevisiae open reading frame YLR118c encodes an enzyme homologous to Rattus norvegicus APT1. We demonstrate that the catalytic activity of the protein encoded by the yeast open reading frame is similar to that of rat APT1, and we designate the protein S. cerevisiae Apt1p. Yeasts bearing a disruption of the APT1 gene lack significant biochemically detectable acyl-protein thioesterase activity. They also fail to deacylate Gpa1p, the yeast G alpha subunit, in metabolic radiolabeling studies. We conclude that native APT1 is the enzyme responsible for G alpha subunit deacylation in S. cerevisiae and presumably other eukaryotes as well.