A set of carboxy-terminal deletion mutants of Saccharomyces cerevisiae DNA topoisomerase II were constructed for studying the functions of the carboxyl domain in vitro and in vivo. The wild-type yeast enzyme is a homodimer with 1,429 amino acid residues in each of the two polypeptides; truncation of the C terminus to Ile-1220 has little effect on the function of the enzyme in vitro or in vivo, whereas truncations extending beyond Gln-1138 yield completely inactive proteins. Several mutant enzymes with C termini in between these two residues were found to be catalytically active but unable to complement a top2-4 temperature-sensitive mutation. Immunomicroscopy results suggest that the removal of a nuclear localization signal in the C-terminal domain is likely to contribute to the physiological dysfunction of these proteins; the ability of these mutant proteins to relax supercoiled DNA in vivo shows, however, that at least some of the mutant proteins are present in the nuclei in a catalytically active form. In contrast to the ability of the catalytically active mutant proteins to relax supercoiled intracellular DNA, all mutants that do not complement the temperature-dependent lethality and high frequency of chromosomal nondisjunction of top2-4 were found to lack decatenation activity in vivo. The plausible roles of the DNA topoisomerase II C-terminal domain, in addition to providing a signal for nuclear localization, are discussed in the light of these results.