Sodium tolerance in yeast is disrupted by mutations in calcineurin, a Ca2+/calmodulin-dependent protein phosphatase, which is required for modulation of Na+ uptake and efflux mechanisms. Five Na+-tolerant mutants were isolated by selecting for suppressors of calcineurin mutations, and mapped to the PMA1 gene, encoding the plasma membrane H+-ATPase. One mutant, pma1-alpha4, which has the single amino acid change Glu367 --> Lys at a highly conserved site within the catalytic domain of the ATPase, was analyzed in detail to determine the mechanism of Na+ tolerance. After exposure to Na+ in the culture medium, 22Na influx in the pma1 mutant was reduced 2-fold relative to control, consistent with a similar decrease in ATPase activity. Efflux of 22Na from intact cells was relatively unchanged in the pma1 mutant. However, selective permeabilization of the plasma membrane revealed that mutant cells retained up to 80% of intracellular Na+ within a slowly exchanging pool. We show that NHX1, a novel gene homologous to the mammalian NHE family of Na+/H+ exchangers, is required for Na+ sequestration in yeast and contributes to the Na+-tolerant phenotype of pma1-alpha4.