An antibody highly specific for heat-shock protein (hsp)26, the unique small hsp of yeast, and mutants carrying a deletion of the HSP26 gene were used to examine the physical properties of the protein and to determine its intracellular distribution. The protein was found in complexes with a molecular mass of greater than 500 kD. Thus, it has all of the characteristics, including sequence homology and induction patterns, of small hsps from other organisms. When log-phase cells growing in glucose were heat shocked, hsp26 concentrated in nuclei and continued to concentrate in nuclei when these cells were returned to normal temperatures for recovery. However, hsp26 did not concentrate in nuclei under a variety of other conditions. For example, in early stationary-phase cells hsp26 is induced at normal growth temperatures. This protein was generally distributed throughout the cells, even after heat shock. Similarly, in cells genetically engineered to synthesize hsp26 in the presence of galactose, hsp26 did not concentrate in nuclei, with or without a heat shock. To determine if the failure of hsp26 to concentrate in the nucleus of these cells was due to the fact that the protein had been produced at 25 degrees C or to a difference in the physiological state of the cell, we investigated the distribution of the heat-induced protein in cells grown under several different conditions. In wild-type cells grown in galactose or acetate and in mitochondrial mutants grown in glucose or galactose, hsp26 also failed to concentrate in nuclei with a heat shock. We conclude that the intracellular location of hsp26 in yeast depends upon the physiological state of the cell and not simply upon the presence or absence of heat stress. Our findings may explain why previous investigations of the intracellular localization of small hsps in a variety of organisms have yielded seemingly contradictory results.