We have identified a 74 kDa double-stranded (ds)RNA-binding protein that shares extensive homology with the mouse spermatid perinuclear RNA-binding (Spnr) protein. p74 contains two dsRNA-binding motifs (dsRBMs) that are essential for preferential binding to dsRNA. Previously, dsRNA-binding proteins were shown to undergo homo- and heterodimerization, raising the possibility that regulation of activity could be controlled by interactions between different family members. Homodimerization is required to activate the dsRNA-dependent protein kinase PKR, whereas hetero-dimerization between PKR and other dsRNA-binding proteins can inhibit kinase activity. We have found that p74 also interacts with PKR, both the wild-type enzyme and a catalytically defective mutant (K296R). While co-expression of p74 and wild-type PKR in the yeast Saccharomyces cerevisiae did not alter PKR activity, co-expression of p74 and the catalytically defective K296R mutant surprisingly resulted in abnormal morphology and cell death in transformants that maintained a high level of p74 expression. These transformants could be rescued by overexpression of the alpha-subunit of wild-type eukaryotic translation initiation factor 2 (eIF2alpha), one of the known substrates for PKR. We hypothesize that competing heterodimers between p74-K296R PKR and eIF2alpha-K296R PKR may control cell growth such that stabilization of the p74-K296R PKR heterodimer induces abnormal morphology and cell death.