We showed previously that protein kinase C, which is required to maintain cell integrity, negatively regulates cell fusion (Philips, J., and I. Herskowitz. 1997. J. Cell Biol. 138:961-974). To identify additional genes involved in cell fusion, we looked for genes whose overexpression relieved the defect caused by activated alleles of Pkc1p. This strategy led to the identification of a novel gene, KEL1, which encodes a protein composed of two domains, one containing six kelch repeats, a motif initially described in the Drosophila protein Kelch (Xue, F., and L. Cooley. 1993. Cell. 72:681- 693), and another domain predicted to form coiled coils. Overexpression of KEL1 also suppressed the defect in cell fusion of spa2Delta and fps1Delta mutants. KEL2, which corresponds to ORF YGR238c, encodes a protein highly similar to Kel1p. Its overexpression also suppressed the mating defect associated with activated Pkc1p. Mutants lacking KEL1 exhibited a moderate defect in cell fusion that was exacerbated by activated alleles of Pkc1p or loss of FUS1, FUS2, or FPS1, but not by loss of SPA2. kel1Delta mutants form cells that are elongated and heterogeneous in shape, indicating that Kel1p is also required for proper morphology during vegetative growth. In contrast, kel2Delta mutants were not impaired in cell fusion or morphology. Both Kel1p and Kel2p localized to the site where cell fusion occurs during mating and to regions of polarized growth during vegetative growth. Coimmunoprecipitation and two-hybrid analyses indicated that Kel1p and Kel2p physically interact. We conclude that Kel1p has a role in cell morphogenesis and cell fusion and may antagonize the Pkc1p pathway.