We describe a method that detects proteins capable of interacting with a known protein and that results in the immediate availability of the cloned genes for these interacting proteins. Plasmids are constructed to encode two hybrid proteins. One hybrid consists of the DNA-binding domain of the yeast transcriptional activator protein GAL4 fused to the known protein; the other hybrid consists of the GAL4 activation domain fused to protein sequences encoded by a library of yeast genomic DNA fragments. Interaction between the known protein and a protein encoded by one of the library plasmids leads to transcriptional activation of a reporter gene containing a binding site for GAL4. We used this method with the yeast SIR4 protein, which is involved in the transcriptional repression of yeast mating type information. (i) We used the two-hybrid system to demonstrate that SIR4 can form homodimers. (ii) A small domain consisting of the C terminus of SIR4 was shown to be sufficient to mediate this interaction. (iii) We screened a library to detect hybrid proteins that could interact with the SIR4 C-terminal domain and identified SIR4 from this library. This approach could be readily extended to mammalian proteins by the construction of appropriate cDNA libraries in the activation domain plasmid.