A gene, PDE2, has been cloned from the yeast Saccharomyces cerevisiae that, when present in high copy, reverses the phenotypic effects of RAS2Val19, a mutant form of the RAS2 gene that renders yeast cells sensitive to heat shock and starvation. It has previously been shown that the RAS proteins are potent activators of yeast adenylate cyclase. We report here that PDE2 encodes a high-affinity cAMP phosphodiesterase that shares sequence homology with animal cell phosphodiesterases. These results therefore imply that the effects of RAS2Val19 are mediated through its changes in cAMP concentration.