Analysis of genes involved in yeast cell wall beta-glucan assembly has led to the isolation of EXG1, PBS2 and PTC1. EXG1 and PBS2 were isolated as genes that, when expressed from multicopy plasmids, led to a dominant killer toxin-resistant phenotype. The PTC1 gene was cloned by functional complementation of the calcofluor white-hypersensitive mutant cwh47-1. PTC1/CWH47 is the structural gene for a type 2C serine/threonine phosphatase, EXG1 codes for an exo-beta-glucanase, and PBS2 encodes a MAP kinase kinase in the Pbs2p-Hog1p signal transduction pathway. Overexpression of EXG1 on a 2 mu plasmid led to reduction in a cell wall beta 1,6-glucan and caused killer resistance in wild type cells; while the exg1 delta mutant displayed modest increases in killer sensitivity and beta 1,6-glucan levels. Disruption of PTC1/CWH47 and overexpression of PBS2 gave rise to similar beta-glucan related phenotypes, with higher levels of EXG1 transcription, increased exo-beta-glucanase activity, reduced beta 1,6-glucan levels, and resistance to killer toxin. Genetic analysis revealed that loss of function of the PBS2 gene was epistatic to PTC1/CWH47 disruption, indicating a functional role for the Ptc1p/Cwh47p phosphatase in the Pbs2p-Hog1p signal transduction pathway. These results suggest that Ptc1p/Cwh47p and Pbs2p play opposing regulatory roles in cell wall glucan assembly, and that this is effected in part by modulating Exg1p activity.