The protein farnesyltransferase (PFT) beta-subunit gene of Saccharomyces cerevisiae, DPR1, was randomly mutagenized by PCR to construct a mutant DPR1 gene library on a high-copy plasmid. The library was screened for suppression of the temperature sensitivity conferred by a mutation in the protein geranylgeranyltransferase type I (PGGT-I) beta-subunit gene, CAL1. A mutant DPR1 gene was identified whose product contained a single amino acid change of Ser-159 to Asn. This mutant gene also suppressed a cal1 disruption even on a low-copy plasmid, suggesting that the product (designated S159N) can substitute for PGGT-I beta subunit in vivo. Its ability to act as a PFT is not drastically reduced, since the mutant gene still complemented a dpr1 disruption. Results of in vitro assays demonstrate that the mutant enzyme has increased activity to farnesylate, a substrate for PGGT-I. On the other hand, the ability to farnesylate its own substrate is reduced. The increased ability to utilize the PGGT-I substrate is due to its increased affinity for the protein substrate. In addition, the mutant enzyme shows a severalfold increase in the sensitivity to a peptidomimetic inhibitor that acts as a competitor of the protein substrate. These results point to the importance of the beta subunit of PFT for the binding of a protein substrate and demonstrate that Ser-159 of DPR1 product is critical for its substrate specificity.