The gene (FPR3) encoding a novel type of peptidylpropyl-cis-trans-isomerase (PPIase) was isolated during a search for previously unidentified nuclear proteins in Saccharomyces cerevisiae. PPIases are thought to act in conjunction with protein chaperones because they accelerate the rate of conformational interconversions around proline residues in polypeptides. The FPR3 gene product (Fpr3) is 413 amino acids long. The 111 COOH-terminal residues of Fpr3 share greater than 40% amino acid identity with a particular class of PPIases, termed FK506-binding proteins (FKBPs) because they are the intracellular receptors for two immunosuppressive compounds, rapamycin and FK506. When expressed in and purified from Escherichia coli, both full-length Fpr3 and its isolated COOH-terminal domain exhibit readily detectable PPIase activity. Both fpr3 delta null mutants and cells expressing FPR3 from its own promoter on a multicopy plasmid have no discernible growth phenotype and do not display any alteration in sensitivity to the growth-inhibitory effects of either FK506 or rapamycin. In S. cerevisiae, the gene for a 112-residue cytosolic FKBP (FPR1) and the gene for a 135-residue ER-associated FKBP (FPR2) have been described before. Even fpr1 fpr2 fpr3 triple mutants are viable. However, in cells carrying an fpr1 delta mutation (which confers resistance to rapamycin), overexpression from the GAL1 promoter of the C-terminal domain of Fpr3, but not full-length Fpr3, restored sensitivity to rapamycin. Conversely, overproduction from the GAL1 promoter of full-length Fpr3, but not its COOH-terminal domain, is growth inhibitory in both normal cells and fpr1 delta mutants. In fpr1 delta cells, the toxic effect of Fpr3 overproduction can be reversed by rapamycin. Overproduction of the NH2-terminal domain of Fpr3 is also growth inhibitory in normal cells and fpr1 delta mutants, but this toxicity is not ameliorated in fpr1 delta cells by rapamycin. The NH2-terminal domain of Fpr3 contains long stretches of acidic residues alternating with blocks of basic residues, a structure that resembles sequences found in nucleolar proteins, including S. cerevisiae NSR1 and mammalian nucleolin. Indirect immunofluorescence with polyclonal antibodies raised against either the NH2- or the COOH-terminal segments of Fpr3 expressed in E. coli demonstrated that Fpr3 is located exclusively in the nucleolus.