The gene encoding a major exopolyphosphatase (scPPX1) in Saccharomyces cerevisiae (H. Wurst and A. Kornberg, J. Biol. Chem. 269:10996-11001, 1994) has been isolated from a genomic library. The gene, located at 57 kbp from the end of the right arm of chromosome VIII, encodes a protein of 396 amino acids. Overexpression in Escherichia coli allowed the ready purification of a recombinant form of the enzyme. Disruption of the gene did not affect the growth rate of S. cerevisiae. Lysates from the mutants displayed considerably lower exopolyphosphatase activity than the wild type. The enzyme is located in the cytosol, whereas the vast accumulation of polyphosphate (polyP) of the yeast is in the vacuole. Disruption of PPX1 in strains with and without deficiencies in vacuolar proteases allowed the identification of exopolyphosphatase activity in the vacuole. This residual activity was strongly reduced in the absence of vacuolar proteases, indicating a dependence on proteolytic activation. A 50-fold-lower protease-independent activity could be distinguished from this protease-dependent activity by different patterns of expression during growth and activation by arginine. With regard to the levels of polyP in various mutants, those deficient in vacuolar ATPase retain less than 1% of the cellular polyP, a loss that is not offset by additional mutations that eliminate the cytosolic exopolyphosphatase and the vacuolar polyphosphatases dependent on vacuolar protease processing.