The Saccharomyces cerevisiae genes TOR1 and TOR2 were originally identified by mutations that confer resistance to the immunosuppressant rapamycin. TOR2 was previously shown to encode an essential 282-kDa phosphatidylinositol kinase (PI kinase) homologue. The TOR1 gene product is also a large (281 kDa) PI kinase homologue, with 67% identity to TOR2. TOR1 is not essential, but a TOR1 TOR2 double disruption uniquely confers a cell cycle (G1) arrest as does exposure to rapamycin; disruption of TOR2 alone is lethal but does not cause a cell cycle arrest. TOR1-TOR2 and TOR2-TOR1 hybrids indicate that carboxy-terminal domains of TOR1 and TOR2 containing a lipid kinase sequence motif are interchangeable and therefore functionally equivalent; the other portions of TOR1 and TOR2 are not interchangeable. The TOR1-1 and TOR2-1 mutations, which confer rapamycin resistance, alter the same potential protein kinase C site in the respective protein's lipid kinase domain. Thus, TOR1 and TOR2 are likely similar but not identical, rapamycin-sensitive PI kinases possibly regulated by phosphorylation. TOR1 and TOR2 may be components of a novel signal transduction pathway controlling progression through G1.