We have cloned the Schizosaccharomyces pombe homologue of the human Batten disease gene, CLN3. This gene, btn1, encodes a predicted transmembrane protein that is 30% identical and 48% similar to its human counterpart. Cells deleted for btn1 were viable but had enlarged and more alkaline vacuoles. Conversely overexpression of Btn1p reduced both vacuole diameter and pH. Thus Btn1p regulates vacuole homeostasis. The vacuolar defects of btn1Delta cells were rescued by heterologous expression of CLN3, proving that Btn1p and CLN3 are functional homologues. The disease severity of Batten disease-causing mutations (G187A, E295K and V330F), when expressed in btn1 appeared to correlate with their effect on vacuolar pH, suggesting that elevated lysosomal pH contributes to the disease process. In fission yeast, both Btn1p and CLN3 trafficked to the vacuole membrane via early endocytic and pre-vacuolar compartments, and localisation of Btn1p to the vacuole membrane was dependent on the Ras GTPase Ypt7p. Importantly, vacuoles in cells deleted for both ypt7 and btn1 were larger and more alkaline than those of cells deleted for ypt7 alone, indicating that Btn1p has a functional role prior to reaching the vacuole. Consistently, btn1 and vma1, the gene encoding subunit A of the V1 portion of vATPase, showed conditional synthetic lethality, and in cells deleted for vma1 (a subunit of the vacuolar ATPase) Btn1p was essential for septum deposition during cytokinesis.