The immunosuppressive drug rapamycin binds to the peptidyl-prolyl cis-trans isomerase FKBP12, and this complex arrests growth of yeast cells and activated T lymphocytes in the G1 phase of the cell cycle. In yeast, loss-of-function mutations in FPR1, the gene encoding FKBP12, or dominant gain-of-function mutations in TOR1 and TOR2, the genes encoding the physical targets of the FKBP12-rapamycin complex, confer rapamycin resistance. Here, we report the cloning and characterization of a novel gene, termed FAP1, which confers resistance to rapamycin by competing with the drug for binding to FKBP12. FAP1 encodes a member of an evolutionarily conserved family of putative transcription factors that includes human NF-X1, Drosophila melanogaster shuttle craft and previously undescribed homologues in Caenorhabditis elegans, Arabidopsis thaliana and Schizosaccharomyces pombe. We provide genetic and biochemical evidence that FAP1 interacts physically with FKBP12 in vivo and in vitro, and that it competes with rapamycin for interaction. Furthermore, mutations in the FKBP12 drug binding/active site or surface residues abolish binding to FAP1. Our results suggest that FAP1 is a physiological ligand for FKBP12 that is highly conserved from yeast to man. Furthermore, prolyl isomerases may commonly bind and regulate transcription factors.