SummaryRio1p was identified as a protein serine kinase founding a novel subfamily. It is highly conserved from Archaea to man and only distantly related to previously established protein kinase families. Nevertheless, analysis of multiple protein sequence alignments shows that those amino acid residues that are important for either structure or catalytic activity in conventional protein kinases are also conserved in members of the Rio1p family at the respective positions (corresponding to domains I–XI of protein kinases). Recombinant Rio1p from Escherichia coli and tagged Rio1p from yeast has kinase activity in vitro, and mutation of amino acid residues that are conserved and indispensable for catalytic activity (i.e. ATP‐binding motif, catalytic centre) abrogates activity. RIO1 is essential in yeast and plays a role in cell cycle progression. After sporulation of RIO1/rio1 diploids, RIO1‐disrupted progeny cease growth after one to three cell divisions and arrest as either large unbudded or large‐budded cells. Cells deprived of Rio1p are enlarged and arrest either in G1 or in mitosis mainly with the DNA at the bud neck and short spindles (a phenotype also seen in cells carrying a weak allele), suggesting that Rio1p activity is required for at least at two steps during the cell division cycle: for entrance into S phase and for exit from mitosis. The weak RIO1 allele leads to increased plasmid loss.