In response to phosphorus limitation, the fungus Neurospora crassa synthesizes a number of enzymes that function to bring more phosphate into the cell. The NUC-2 protein appears to sense the availability of phosphate and transmits the signal downstream to the regulatory pathway. The nuc-2+ gene has been cloned by its ability to restore growth of a nuc-2 mutant under restrictive conditions of high pH and low phosphate concentration. We mapped the cloned gene to the right arm of linkage group II, consistent with the chromosomal position of the nuc-2 mutation as determined by classical genetic mapping. The nuc-2' open reading frame is interrupted by five introns and codes for a protein of 1066 amino acid residues. Its predicted amino acid sequence has high similarity to that of its homolog in Saccharomyces cerevisiae, PHO81. Both proteins contain six ankyrin repeats, which have been implicated in the cyclin-dependent kinase inhibitory activity of PHO81. The phenotypes of a nuc-2 mutant generated by repeat-induced point mutation and of a strain harboring a UV-induced nuc-2 allele are indistinguishable. Both are unable to grow under the restrictive conditions, a phenotype which is to some degree temperature dependent. The nuc-2+ gene is transcriptionally regulated. A 15-fold increase in the level of the nuc-2+ transcript occurs in response to a decrease in exogenous phosphate concentration.