The eukaryotic translation initiation factor eIF-2 plays a critical role in regulating the expression of the yeast transcriptional activator GCN4. Mutations in genes encoding the alpha and beta subunits of eIF-2 alter translational efficiency at the GCN4 AUG codon and constitutively elevate GCN4 translation. Mutations in the yeast GCD11 gene have been shown to confer a similar phenotype. The nucleotide sequence of the cloned GCD11 gene predicts a 527-amino-acid polypeptide that is similar to the prokaryotic translation elongation factor EF-Tu. Relative to EF-Tu, the deduced GCD11 amino acid sequence contains a 90-amino-acid N-terminal extension and an internal cysteine-rich sequence that contains a potential metal-binding finger motif. We have identified the GCD11 gene product as the gamma subunit of eIF-2 by the following criteria: (i) sequence identities with mammalian eIF-2 gamma peptides; (ii) increased eIF-2 activity in extracts prepared from cells cooverexpressing GCD11, eIF-2 alpha, and eIF-2 beta; and (iii) cross-reactivity of antibodies directed against the GCD11 protein with the 58-kDa polypeptide present in purified yeast eIF-2. The predicted GCD11 polypeptide contains all of the consensus elements known to be required for guanine nucleotide binding, suggesting that, in Saccharomyces cerevisiae, the gamma subunit of eIF-2 is responsible for GDP-GTP binding.