btn1, the Schizosaccharomyces pombe orthologue of the human Batten disease gene CLN3, exerts multiple cellular effects. As well as a role in vacuole pH homoeostasis, we now show that Btn1p is essential for growth at high temperatures. Its absence results in progressive defects at 37 degrees C that culminate in total depolarized growth and cell lysis. These defects are preceded by a progressive failure to correctly polarize sterol-rich domains after cytokinesis and are accompanied by loss of Myo1p localization. Furthermore, we found that in Sz. pombe, sterol spreading is linked to defective formation/polarization of F-actin patches and disruption of endocytosis and that these processes are aberrant in btn1Delta cells. Consistent with a role for Btn1p in polarized growth, Btn1p has an altered location at 37 degrees C and is retained in actin-dependent endomembrane structures near the cell poles or septum.