The fission yeast Schizosaccharomyces pombe detoxifies cadmium by synthesizing phytochelatins, peptides of the structure (gamma-GluCys)nGly, which bind cadmium and mediate its sequestration into the vacuole. The fission yeast protein HMT2, a mitochondrial enzyme that can oxidize sulphide, appears to be essential for tolerance to multiple forms of stress, including exposure to cadmium. We found that the hmt2- mutant is unable to accumulate normal levels of phytochelatins in response to cadmium, although the cells possess a phytochelatin synthase that is active in vitro. Radioactive pulse-chase experiments demonstrated that the defect lies in two steps: the synthesis of phytochelations and the upregulation of glutathione production. Phytochelatins, once formed, are stable. hmt2- cells accumulate high levels of sulphide and, when exposed to cadmium, display bright fluorescent bodies consistent with cadmium sulphide. We propose that the precipitation of free cadmium blocks phytochelatin synthesis in vivo, by preventing upregulation of glutathione production and formation of the cadmium-glutathione thiolate required as a substrate by phytochelatin synthase. Thus, although sulphide is required for phytochelatin-mediated metal tolerance, aberrantly high sulphide levels can inhibit this pathway. Precise regulation of sulphur metabolism, mediated in part by HMT2, is essential for metal tolerance in fission yeast.