Sds22p is a conserved, leucine-rich repeat protein that interacts with the catalytic subunit of protein phosphatase 1 (PP1(C)) and which has been proposed to regulate one or more functions of PP1(C) during mitosis. Here we show that Saccharomyces cerevisiae Sds22p is a largely nuclear protein, most of which is present as a sTable 1:1 complex with yeast PP1(C) (Glc7p). Temperature-sensitive (Ts(-)) S. cerevisiae sds22 mutants show profound chromosome instability at elevated growth temperatures but do not confer a cell cycle stage-specific arrest. In the sds22-6 Ts(-) mutant, nuclear Glc7p is both reduced in level and aberrantly localized at 37 degrees C and the interaction between Glc7p and Sds22p in vitro is reduced at higher temperatures, consistent with the in vivo Ts(-) growth defect. Like some glc7 mutations, sds22-6 can suppress the Ts(-) growth defect associated with ipl1-2, a loss of function mutation in a protein kinase that is known to work in opposition to PP1 on at least two nuclear substrates. This, together with reciprocal genetic interactions between GLC7 and SDS22, suggests that Sds22p functions positively with Glc7p to promote dephosphorylation of nuclear substrates required for faithful transmission of chromosomes during mitosis, and this role is at least partly mediated by effects of Sds22p on the nuclear distribution of Glc7p