Cells of the yeast Saccharomyces cerevisiae choose bud sites in a non-random spatial pattern that depends on mating type: axial for haploid cells and bipolar for a/alpha diploid cells. We identified a mutant yeast, axl 1, in which the budding pattern is altered from axial to bipolar. Expression of the AXL1 gene is repressed in a/alpha diploid cells. With the ectopic expression of AXL1, a/alpha cells exhibited an axial budding pattern, thus AXL1 is a key morphological determinant that distinguishes the budding pattern of haploid cells from that of a/alpha diploid cells. AXL1 encodes a protein similar in sequence of the human and Drosophila insulin-degrading enzymes and to the Escherichia coli ptr gene product. The axial budding pattern might result from degradation of a target protein by the putative Axl1 protease.