Congo red binds to the cell wall and inhibits the growth of yeast. In a screening for multicopy suppressor genes of Congo red hypersensitivity of erd1Delta mutant, we found that a previously uncharacterized gene, YBR005w, makes most of the Saccharomyces cerevisiae strains resistant to Congo red. This gene was named RCR1 (resistance to Congo red 1). An rcr1Delta null mutant showed an increased sensitivity to Congo red. RCR1 encodes a novel ER membrane protein with a single transmembrane domain. Molecular dissection suggested that the transmembrane domain and a part of the C-terminal polypeptide are sufficient for the activity. We examined the effect of RCR1 in various null mutants of genes related to the cell wall. The resistance of mutants to Congo red correlates with a reduction of chitin content. Multicopy RCR1 caused a significant decrease in the chitin content while the amount of alkali-soluble glucan did not change. The binding of Calcofluor white to the cell wall significantly decreased in these cells. Our results show that RCR1 regulates the chitin deposition and add firm genetic and biochemical evidences that the primary target of Congo red is chitin in S. cerevisiae.