Aminoacyl-tRNA-protein transferases (Arg-transferases) catalyze post-translational conjugation of specific amino acids to the amino termini of acceptor proteins. A function of these enzymes in eukaryotes has been shown to involve the conjugation of destabilizing amino acids to the amino termini of short-lived proteins, these reactions being a part of the N-end rule pathway of protein degradation (Gonda, D. K., Bachmair, A., Wünning, I., Tobias, J. W., Lane, W. S., and Varshavsky, A. (1989) J. Biol. Chem. 264, 16700-16712). We have cloned the ATE1 gene of the yeast Saccharomyces cerevisiae which encodes arginyl-tRNA-protein transferase. ATE1 gives rise to a approximately 1.6-kilobase mRNA and codes for a 503-residue protein. Expression of the yeast ATE1 gene in Escherichia coli, which lacks Arg-transferases, was used to show that the ATE1 protein possesses the Arg-transferase activity. Null ate1 mutants are viable but lack the Arg-transferase activity and are unable to degrade those substrates of the N-end rule pathway that start with residues recognized by the Arg-transferase.