Mammalian phosducins are known to bind G protein betagamma subunits in vitro, and are postulated to regulate their signaling function in vivo. Here we describe two homologues of phosducin in yeast, called PLP1 and PLP2. Both gene products were cloned, expressed, and purified as glutathione S-transferase fusions. Of the two isoforms, Plp1 bound most preferentially to Gbetagamma. Binding was enhanced by pheromone stimulation and by the addition of GTPgammaS, conditions that favor dissociation of Gbetagamma from Galpha. Gene disruption mutants and gene overexpression plasmids were prepared and analyzed for changes in signaling and nonsignaling phenotypes. Haploid spore products bearing the plp2Delta mutant failed to grow, suggesting that PLP2 is an essential gene. Cell viability was not restored by a mutation in STE7 that blocks signaling downstream of the G protein. Haploid products bearing the plp1Delta mutant were viable and exhibited a 6-7% increase in pheromone-mediated gene induction. Cells overexpressing PLP1 or PLP2 exhibited a 70-80% decrease in gene induction but no change in pheromone-mediated growth arrest. These data indicate that phosducin can selectively regulate early signaling events following pheromone stimulation and has an essential role in cell growth independent of its regulatory role in cell signaling.