We have analyzed the CHL15 gene, earlier identified in a screen for yeast mutants with increased loss of chromosome III and artificial circular and linear chromosomes in mitosis. Mutations in the CHL15 gene lead to a 100-fold increase in the rate of chromosome III loss per cell division and a 200-fold increase in the rate of marker homozygosis on this chromosome by mitotic recombination. Analysis of segregation of artificial circular minichromosome and artificially generated nonessential marker chromosome fragment indicated that sister chromatid loss (1:0 segregation) is a main reason of chromosome destabilization in the chl15-1 mutant. A genomic clone of CHL15 was isolated and used to map its physical position on chromosome XVI. Nucleotide sequence analysis of CHL15 revealed a 2.8-kb open reading frame with a 105-kD predicted protein sequence. At the N-terminal region of the protein sequences potentially able to form DNA-binding domains defined as zinc-fingers were found. The C-terminal region of the predicted protein displayed a similarity to sequence of regulatory proteins known as the helix-loop-helix (HLH) proteins. Data on partial deletion analysis suggest that the HLH domain is essential for the function of the CHL15 gene product. Analysis of the upstream untranslated region of CHL15 revealed the presence of the hexamer element, ACGCGT (an MluI restriction site) controlling both the periodic expression and coordinate regulation of the DNA synthesis genes in budding yeast. Deletion in the RAD52 gene, the product of which is involved in double-strand break/recombination repair and replication, leads to a considerable decrease in the growth rate of the chl15 mutant. We suggest that CHL15 is a new DNA synthesis gene in the yeast Saccharomyces cerevisiae.