Calcineurin (CN), a highly conserved Ca2+/calmodulin-regulated phosphatase, is a critical component of many calcium-regulated processes in mammalian cells, including T cell activation, cardiac hypertrophy, learning and memory. CN is specifically inhibited by the immunosuppressant drugs cyclosporin A and tacrolimus (FK506), and these drugs have served as valuable reagents in identifying the role of CN in a wide variety of cell types. CN may have additional functions in other cell types, and the loss of these functions may contribute to the side effects of these drugs, which include nephrotoxicity and neurotoxicity. A better understanding of the biological roles of CN in different cell types may promote the development of improved strategies for immunosuppression. We have been studying the CN signal transduction pathway in fission yeast because this system is amenable to genetics and has many advantages in terms of relevance to higher systems. Fission yeast has a single gene encoding the catalytic subunit of CN, ppb1+, that is essential for cytokinesis. We have shown that in fission yeast CN plays an essential role in maintaining chloride ion homeostasis and acts antagonistically with the Pmk1 MAP kinase pathway. We also carried out an isolation and a screening for several FK506-sensitive mutants in order to identify genes that share an essential function for viability with CN. Possible roles of these gene products in cellular functions in relation to calcineurin are discussed.