Protein phosphatase 2A (PP2A), a heterotrimeric serine/threonine-specific protein phosphatase, comprises a catalytic subunit and two distinct regulatory subunits, A and B. The primary sequence of the catalytic (C) subunit is highly conserved in evolution, and its function has been shown to be essential in yeast, Drosophila and mice. In many eukaryotes, the C subunit is encoded by at least two nearly identical genes, impeding conventional loss-of-function genetic analysis. We report here the development of a functional complementation assay in S. cerevisiae that has allowed us to isolate dominant-defective alleles of human and Arabidopsis C subunit genes. Wild-type human and Arabidopsis C subunit genes can complement the lethal phenotype of S. cerevisiae PP2A-C mutations. Site-directed mutagenesis was used to create two distinct, catalytically impaired C subunit mutants of the human and Arabidopsis genes. In both cases, expression of the mutant subunit in yeast prevented growth, even in the presence of functional C subunit proteins. This dominant growth defect is consistent with a dominant-interfering mode of action. Thus, we have shown that S. cerevisiae provides a rapid system for the functional analysis of heterologous PP2A genes, and that two mutations that abrogate phosphatase activity exhibit dominant-defective phenotypes in S. cerevisiae.