We describe the isolation of a yeast gene, ADA3, mutations in which prevent the toxicity of GAL4-VP16 in vivo. Toxicity was previously proposed to be due to the trapping of general transcription factors required at RNA polymerase II promoters (S. L. Berger, B. Piña, N. Silverman, G. A. Marcus, J. Agapite, J. L. Regier, S. J. Triezenberg, and L. Guarente, Cell 70:251-265, 1992). trans activation by VP16 as well as the acidic activation domain of GCN4 is reduced in the mutant. Other activation domains, such as those of GAL4 and HAP4, are only slightly affected in the mutant. This spectrum is similar to that observed for mutants with lesions in ADA2, a gene proposed to encode a transcriptional adaptor. The ADA3 gene is not absolutely essential for cell growth, but gene disruption mutants grow slowly and are temperature sensitive. Strains doubly disrupted for ada2 and ada3 grow no more slowly than single mutants, providing further evidence that these genes function in the same pathway. Selection of initiation sites by the general transcriptional machinery in vitro is altered in the ada3 mutant, providing a clue that ADA3 could be a novel general transcription factor involved in the response to acidic activators.