Proteinase yscE is the yeast equivalent of the proteasome, a multicatalytic-multifunctional proteinase found in higher eukaryotic cells. We have isolated three mutants affecting the proteolytic activity of proteinase yscE. The mutants show a specific reduction in the activity of the complex against peptide substrates with hydrophobic amino acids at the cleavage site and define two complementation groups, PRE1 and PRE2. The PRE1 gene was cloned and shown to be essential. The deduced amino acid sequence encoded by the PRE1 gene reveals weak, but significant similarities to proteasome subunits of other organisms. Two-dimensional gel electrophoresis identified the yeast proteasome to be composed of 14 different subunits. Comparison of these 14 subunits with the translation product obtained from PRE1 mRNA synthesized in vitro demonstrated that PRE1 encodes the 22.6 kd subunit (numbered 11) of the yeast proteasome. Diploids homozygous for pre1-1 are defective in sporulation. Strains carrying the pre1-1 mutation show enhanced sensitivity to stresses such as incorporation of the amino acid analogue canavanine into proteins or a combination of poor growth medium and elevated temperature. Under these stress conditions pre1-1 mutant cells exhibit decreased protein degradation and accumulate ubiquitin-protein conjugates.