The TOR pathway controls cellular functions necessary for cell growth and proliferation of yeast and larger eukaryotes. The search for members of the TOR signaling cascade in yeast led to the discovery of type 2A protein phosphatases (PP2A) as important players within the pathway. We describe the roles in yeast of PP2A and the closely related phosphatase, Sit4, and then focus on complexes formed between the catalytic subunit of these phosphatases and Tap42, a direct target of the Tor protein kinases in yeast. Recent results suggest that Tap42 mediates many of the Tor functions in yeast, especially those involved in transcriptional modulation. However, whether Tap42 executes its function by inhibiting phosphatase activity or by activating phosphatases is still uncertain. In addition, Tor affects some transcriptional and physiological processes through Tap42 independent pathways. Thus, Tor proteins use multiple mechanisms to regulate transcriptional and physiological processes in yeast.