A 3.2 kb yeast DNA fragment containing the DNA interstrand cross-link-specific repair gene SNM1 has been sequenced. Two genes were identified. SNM1 has an open reading frame of 1983 bp and codes for a 661 amino acid protein. Hydrophobic analysis shows that the protein is most probably not directly membrane bound. The second gene, UGX1, has an open reading frame of 573 bp coding for a polypeptide of 191 amino acid residues. The two genes are arranged head to head and share a 192 bp divergent promoter region that contains three TATAAA motives, two for the SNM1 and one for the UGX1 locus. Gene UGX1 has no apparent influence on the sensitivity of the cell to cross-linking nitrogen mustard, as its disruption in wild type does not increase sensitivity to nitrogen mustard and the presence of multiple copies of the gene fails to complement the nitrogen mustard sensitivity phenotype of snm1 disruption mutants. Northern analysis revealed that the expression of SNM1 yields an average of 0.3 copies/cell of a 2.4 kb transcript, while expression of UGX1 yields higher levels of a 0.8 kb poly(A)+ RNA.