We have isolated a gene (NOP2) encoding a nucleolar protein during a search for previously unidentified nuclear proteins in the yeast Saccharomyces cerevisiae. The protein encoded by NOP2 (Nop2p) has a predicted molecular mass of 70 kD, migrates at 90 kD by SDS-PAGE, and is essential for cell viability. Nop2p shows significant amino acid sequence homology to a human proliferation-associated nucleolar protein, p120. Approximately half of Nop2p exhibits 67% amino acid sequence identity to p120. Analysis of subcellular fractions indicates that Nop2p is located primarily in the nucleus, and nuclear fractionation studies suggest that Nop2p is associated with the nucleolus. Indirect immunofluorescence localization of Nop2p shows a nucleolar-staining pattern, which is heterogeneous in appearance, and a faint staining of the cytoplasm. The expression of NOP2 during the transition from stationary phase growth arrest to rapid growth was measured, and compared to the expression of TCM1, which encodes the ribosomal protein L3. Nop2p protein levels are markedly upregulated during the onset of growth, compared to the levels of ribosomal protein L3, which remain relatively constant. NOP2 mRNA levels also increase during the onset of growth, accompanied by a similar increase in the levels of TCM1 mRNA. The consequences of overexpressing NOP2 from the GAL10 promoter on a multicopy plasmid were investigated. Although NOP2 overexpression produced no discernible growth phenotype and had no effect on ribosome subunit synthesis, overexpression was found to influence the morphology of the nucleolus, as judged by electron microscopy. Overexpression caused the nucleolus to become detached from the nuclear envelope and to become more rounded and/or fragmented in appearance. These findings suggest roles for NOP2 in nucleolar function during the onset of growth, and in the maintenance of nucleolar structure.