The Na+/H+ antiporter Nha1p of S. cerevisiae plays an important role in maintaining intracellular pH and Na+ homeostasis. Nha1p has a two-domain structure comprised of integral membrane and hydrophilic tail regions. Overexpression of a peptide of approximately 40 residues (C1+C2 domains) that is localized in the juxtamembrane area of its cytoplasmic tail caused cell-growth retardation in highly saline conditions, possibly by decreasing Na+/H+ antiporter activity. A multi-copy suppressor gene of this growth retardation was identified from a yeast genome library. The clone encodes a novel membrane protein denoted as COS3 in the genome database. Overexpression or deletion of COS3 increases or decreases salinity-resistant cell growth, respectively. However, in nha1D cells, overexpression of COS3 alone did not suppress the growth retardation. Cos3p and a hydrophilic portion of Cos3p interact with the C1+C2 peptide in vitro and Cos3p is co-precipitated with Nha1p from yeast cell extracts. Cos3p-GFP mainly resides at the vacuole but overexpression of Nha1p caused a portion of the Cos3p-GFP proteins to shift to the cytoplasmic membrane. These observations suggest that Cos3p is a novel membrane protein that can enhance salinity-resistant cell growth by interacting with the C1+C2 domain of Nha1p and thereby possibly activating the antiporter activity of this protein.