A possible role for posttranslational modifications in regulating the activity of ATP-binding cassette (ABC) transporters has not been well established. In this study, the drug efflux ABC transporter gene KlPDR5 was isolated from the budding yeast Kluyveromyces lactis, and it was found that the encoded KlPdr5 drug pump is posttranslationally regulated by the type 2A-related Ser/Thr protein phosphatase, Sit4p. The KlPdr5 transporter is a protein of 1,525 amino acids sharing 63.8% sequence identity with its Saccharomyces cerevisiae counterpart, ScPdr5p. Overexpression of the KlPDR5 gene confers resistance to oligomycin, antimycin, econazole, and ketoconazole, whereas cells with a disrupted allele of KlPDR5 are hypersensitive to the drugs and have a decreased capacity to carry out efflux of the anionic fluorescent dye rhodamine 123. It was found that a chromosomal disruption of KlPDR5 abolishes the drug-resistant phenotype associated with sit4 mutations and that a synergistic hyperresistance to the drugs can be created by overexpressing KlPDR5 in sit4 mutants. These data strongly indicate that the multidrug-resistant phenotype of sit4 mutants is mediated by negatively modulating the activity of KlPdr5p. As the transcriptional level of KlPDR5 and the steady-state level of KlPdr5p are not significantly affected by mutations in SIT4, the regulation by Sit4p appears to be a posttranslational process.