Mutations in the Saccharomyces cerevisiae SPT6 gene were originally identified as one class of extragenic suppressors of Ty and delta insertion mutations in the 5' noncoding regions of HIS4 and LYS2. We cloned SPT6 and constructed a null allele by gene disruption. Haploid spores carrying the spt6 null allele were inviable, indicating that the SPT6 gene is essential for mitotic growth. SPT6 was mapped to the right arm of chromosome VII, 44 centimorgans (cM) from ADE6 and 9 cM from CLY8. We showed that spt6 mutations suppress delta insertion mutations at the level of transcription but have no qualitative or quantitative effect on Ty transcription. In addition, we observed interesting SPT6 gene dosage effects. An SPT6 strain containing a high-copy-number plasmid clone of SPT6 showed suppression of delta insertion mutations, and a diploid strain with half its normal dose of SPT6 (SPT6/spt6 null) also exhibited suppression of delta insertion mutations. Therefore, having either too many or too few copies of SPT6 causes a mutant phenotype. Finally, this study and that in the accompanying paper (L. Neigeborn, J. L. Celenza, and M. Carlson, Mol. Cell. Biol. 7:679-686, 1986) showed that spt6 and ssn20 mutations (isolated as suppressors of snf2 and snf5 [sucrose nonfermenting] mutations) identify the same gene. SPT6 and SSN20 have the same genetic map position and share an identical restriction map. Furthermore, spt6 and ssn20 mutations fail to complement each other, and ssn20 mutations suppress solo delta insertion mutations at HIS4 and LYS2. These results, taken in conjunction with the SPT6 dosage effects and the fact that SPT6 is an essential gene, suggest that SPT6 plays a fundamental role in cellular transcription, perhaps by interaction with other transcription factors.