We have analyzed the CTF4 (CHL15) gene, earlier identified in two screens for yeast mutants with increased rates of mitotic loss of chromosome III and artificial circular and linear chromosomes. Analysis of the segregation properties of circular minichromosomes and chromosome fragments indicated that sister chromatid loss (1:0 segregation) is the predominant mode of chromosome destabilization in ctf4 mutants, though nondisjunction events (2:0 segregation) also occur at an increased rate. Both inter- and intrachromosomal mitotic recombination levels are elevated in ctf4 mutants, whereas spontaneous mutation to canavanine resistance was not elevated. A genomic clone of CTF4 was isolated and used to map its physical and genetic positions on chromosome XVI. Nucleotide sequence analysis of CTF4 revealed a 2.8-kb open reading frame with a 105-kDa predicted protein sequence. The CTF4 DNA sequence is identical to that of POB1, characterized as a gene encoding a protein that associates in vitro with DNA polymerase alpha. At the N-terminal region of the protein sequence, zinc finger motifs which define potential DNA-binding domains were found. The C-terminal region of the predicted protein displayed similarity to sequences of regulatory proteins known as the helix-loop-helix proteins. Data on the effects of a frameshift mutation suggest that the helix-loop-helix domain is essential for CTF4 function. Analysis of sequences upstream of the CTF4 open reading frame revealed the presence of a hexamer element, ACGCGT, a sequence associated with many DNA metabolism genes in budding yeasts. Disruption of the coding sequence of CTF4 did not result in inviability, indicating that the CTF4 gene is nonessential for mitotic cell division. However, ctf4 mutants exhibit an accumulation of large budded cells with the nucleus in the neck. ctf4 rad52 double mutants grew very slowly and produced extremely high levels (50%) of inviable cell division products compared with either single mutant alone, which is consistent with a role for CTF4 in DNA metabolism.