We have identified a gene (NPI46) encoding a new prolyl cis-trans isomerase within the nucleolus of the yeast Saccharomyces cerevisiae. The protein encoded by NPI46 was originally found by us in a search for proteins that recognize nuclear localization sequences (NLSs) in vitro. Thus, NPI46 binds to affinity columns that contain a wild-type histone H2B NLS but not a mutant H2B NLS that is incompetent for nuclear localization in vivo. NPI46 has two domains, a highly charged NH2 terminus similar to two other mammalian nucleolar proteins, nucleolin and Nopp140, and a COOH terminus with 45% homology to a family of mammalian and yeast proline isomerases. NPI46 is capable of catalyzing the prolyl cis-trans isomerization of two small synthetic peptides, succinyl-Ala-Leu-Pro-Phe-p-nitroanilide and succinyl-Ala-Ala-Pro-Phe-p-nitroanilide, as measured by a chymotrypsin-coupled spectrophotometric assay. By indirect immunofluorescence we have shown that NPI46 is a nucleolar protein. NPI46 is not essential for cell viability.