AbstractCaffeine exerts pleiotropic effects on eukaryotic cells via its ability to act as a low‐affinity adenosine analogue. Here we report that the genes HSE1, RTS3, SDS23 and SDS24 confer caffeine resistance when overexpressed in S. cerevisiae. The Hse1 protein functions in ubiquitin‐dependent vacuolar protein sorting, whereas the other proteins are poorly characterized. Bioinformatic analysis of genetic and physical interaction data linked Rts3 and Sds23/24 to the phosphatase 2A‐like Sit4 pathway. Combinatorial deletions of the identified suppressor genes conferred varying levels of caffeine hypersensitivity. For hse1Δ and rts3Δ mutants, caffeine sensitivity was partially rescued by sorbitol osmostabilization, suggesting possible cell wall integrity defects in these strains. Rapamycin sensitivity experiments linked the caffeine sensitivity of rts3Δ, but not that of sds23/24Δ or hse1Δ strains, to inhibition of the TORC1 kinase complex, a central regulator of cell growth and a known caffeine target. Epistasis experiments support a model in which Rts3 and Sds23/24 act in parallel to negatively regulate Sit4, while Hse1 confers caffeine resistance via a separate pathway. In summary, this study identifies the Sit4 phosphatase pathway and membrane protein dynamics as key modulators of caffeine‐mediated inhibition of yeast cell growth and proposes novel functions for Rts3 and Sds23/24. Copyright © 2010 John Wiley & Sons, Ltd.