In Saccharomyces cerevisiae, the Ca(2+)/calmodulin-dependent protein phosphatase, calcineurin, is activated by specific environmental conditions, including exposure to Ca(2+) and Na(+), and induces gene expression by regulating the Crz1p/Tcn1p transcription factor. We used DNA microarrays to perform a comprehensive analysis of calcineurin/Crz1p-dependent gene expression following addition of Ca(2+) (200 mm) or Na(+) (0.8 m) to yeast. 163 genes exhibited increased expression that was reduced 50% or more by calcineurin inhibition. These calcineurin-dependent genes function in signaling pathways, ion/small molecule transport, cell wall maintenance, and vesicular transport, and include many open reading frames of previously unknown function. Three distinct gene classes were defined as follows: 28 genes displayed calcineurin-dependent induction in response to Ca(2+) and Na(+), 125 showed calcineurin-dependent expression following Ca(2+) but not Na(+) addition, and 10 were regulated by calcineurin in response to Na(+) but not Ca(2+). Analysis of crz1Delta cells established Crz1p as the major effector of calcineurin-regulated gene expression in yeast. We identified the Crz1p-binding site as 5'-GNGGC(G/T)CA-3' by in vitro site selection. A similar sequence, 5'-GAGGCTG-3', was identified as a common sequence motif in the upstream regions of calcineurin/ Crz1p-dependent genes. This finding is consistent with direct regulation of these genes by Crz1p.