In the vegetative (mitotic) cycle and during sexual conjugation, yeast cells display polarized growth, giving rise to a bud or to a mating projection, respectively. In both cases one can distinguish three steps in these processes: choice of a growth site, organization of the growth site, and actual growth and morphogenesis. In all three steps, small GTP-binding proteins (G proteins) and their regulators play essential signaling functions. For the choice of a bud site, Bud1, a small G protein, Bud2, a negative regulator of Bud1, and Bud5, an activator, are all required. If any of them is defective, the cell loses its ability to select a proper bud position and buds randomly. In the organization of the bud site or of the site in which a mating projection appears, Cdc42, its activator Cdc24, and its negative regulators play a fundamental role. In the absence of Cdc42 or Cdc24, the actin cytoskeleton does not become organized and budding does not take place. Finally, another small G protein, Rho1, is required for activity of beta (1-->3)glucan synthase, the enzyme that catalyzes the synthesis of the major structural component of the yeast cell wall. In all of the above processes, G proteins can work as molecular switches because of their ability to shift between an active GTP-bound state and an inactive GDP-bound state.