Mutations in EBS1 were identified in Saccharomyces cerevisiae that cosuppress missense, frameshift, and nonsense mutations. Evidence from studies of loss of function and overexpression of EBS1 suggests that Ebs1p affects gene expression by inhibiting translation and that a loss of EBS1 function causes suppression by increasing the rate of translation. Changes in EBS1 expression levels alter the expression of wild-type genes, but, in general, no changes in mRNA abundance were associated with a loss of function or overexpression of EBS1. Translation of a lacZ reporter was increased in strains carrying an ebs1-Delta mutant gene, whereas translation was decreased when EBS1 was overexpressed. The cap binding protein eIF-4E copurifies with Ebs1p in the absence of RNA, suggesting that the two proteins interact in vivo. Although physical and genetic interactions were detected between Ebs1p and Dcp1p, copurification was RNase sensitive, and changes in the expression of Ebs1p had little to no effect on decapping of the MFA2 transcript. The combined results suggest that Ebs1p inhibits translation, most likely through effects on eIF-4E rather than on decapping. Finally, EBS1 transcript levels are under the control of nonsense-mediated mRNA decay (NMD), providing the first example of an NMD-sensitive transcript whose protein product influences a step in gene expression required for NMD.