The LEA-like protein HSP 12 was identified as having a plasma membrane location in yeast. Gold particles, indicative of the presence of HSP 12, were observed on the external side of the plasma membrane when yeast grown to stationary phase were subjected to immunocytochemical analysis. Growth of yeast in the osmolyte mannitol resulted in an increased number of gold particles that were now observed to be present on both sides of the plasma membrane. No gold particles were observed using a mutant strain of the same yeast that did not express HSP 12. A model liposome system encapsulating the fluorescent dye calcein was used to investigate the protection by HSP 12 of membranes during desiccation. HSP 12 was found to act in an analogous manner to trehalose and protect liposomal membrane integrity against desiccation. The interaction between HSP 12 and the liposomal membrane was judged to be electrostatic as membrane protection was only observed with positively charged liposomes and not with either neutral or negatively charged liposomes. The ability of the wild-type and mutant yeast to grow in media containing ethanol was compared. It was found that yeast not expressing the HSP 12 protein were less able to grow in media containing ethanol. HSP 12 was shown to confer increased integrity on the liposomal membrane in the presence of ethanol. Ethanol, like mannitol, was found to induce HSP 12 protein synthesis. However, yeast grown in both ethanol and mannitol showed a decreased HSP 12 response compared with yeast grown in the presence of either osmolyte alone.