The protein phosphatase 2A (PP2A) holoenzyme is structurally conserved among eukaryotes. This reflects a conservation of function in vivo because the human catalytic subunit (PP2Ac) functionally replaced the endogenous PP2Ac of Saccharomyces cerevisiae and bound the yeast regulatory PR65/A subunit (Tpd3p) forming a dimer. Yeast was employed as a novel system for mutagenesis and functional analysis of human PP2Ac, revealing that the invariant C-terminal leucine residue, a site of regulatory methylation, is apparently dispensable for protein function. However, truncated forms of human PP2Ac lacking larger portions of the C terminus exerted a dominant interfering effect, as did several mutant forms containing a substitution mutation. Computer modeling of PP2Ac structure revealed that interfering amino acid substitutions clustered to the active site, and consistently, the PP2Ac-L199P mutant protein was catalytically impaired despite binding Tpd3p. Thus, interfering forms of PP2Ac titrate regulatory subunits and/or substrates into non-productive complexes and will serve as useful tools for studying PP2A function in mammalian cells. The transgenic approach employed here, involving a simple screen for interfering mutants, may be applicable generally to the analysis of structure-function relationships within protein phosphatases and other conserved proteins and demonstrates further the utility of yeast for analyzing gene function.