The response to damage is crucial for cellular survival, and eukaryotic cells require a broad array of proteins for an intact damage response. We have found that the YPL170W (DAP1 [for damage response protein related to membrane-associated progesterone receptors]) gene is required for growth in the presence of the methylating agent methyl methanesulfonate (MMS). The DAP1 open reading frame shares homology with a broadly conserved family of membrane-associated progesterone receptors (MAPRs). Deletion of DAP1 leads to sensitivity to MMS, elongated telomeres, loss of mitochondrial function, and partial arrest in sterol synthesis. Sensitivity of dap1 strains to MMS is not due to loss of damage checkpoints. Instead, dap1 cells are arrested as unbudded cells after MMS treatment, suggesting that Dap1p is required for cell cycle progression following damage. Dap1p also directs resistance to itraconazole and fluconazole, inhibitors of sterol synthesis. We have found that dap1 cells have slightly decreased levels of ergosterol but increased levels of the ergosterol intermediates squalene and lanosterol, indicating that dap1 cells have a partial defect in sterol synthesis. This is the first evidence linking a MAPR family member to sterol regulation or the response to damage, and these functions are probably conserved in a variety of eukaryotes.