Yeast cyclic AMP (cAMP)-dependent protein kinase (PKA) activity is essential for growth and cell cycle progression. Dependence on PKA function can be partially relieved by overexpression of a gene, SOK2, whose product has significant homology with several fungal transcription factors (StuA from Aspergillus nidulans and Phd1 from Saccharomyces cerevisiae) that are associated with cellular differentiation and development. Deletion of SOK2 is not lethal but exacerbates the growth defect of strains compromised for PKA activity. Alterations in Sok2 protein production also affect the expression of genes involved in several other PKA-regulated processes, including glycogen accumulation (GAC1) and heat shock resistance (SSA3). These results suggest SOK2 plays a general regulatory role in the PKA signal transduction pathway. Expression of the PKA catalytic subunit genes is unaltered by deletion or overexpression of SOK2. Because homozygous sok2/sok2 diploid strains form pseudohyphae at an accelerated rate, the Sok2 protein may inhibit the switch from unicellular to filamentous growth, a process that is dependent on cAMP. Thus, the product of SOK2 may act downstream of PKA to regulate the expression of genes important in growth and development.