Calcineurin is a serine-threonine specific Ca²⁺-calmodulin-activated protein phosphatase that is conserved from yeast to humans. Remarkably, this enzyme is the common target for two novel and structurally unrelated immunosuppressive antifungal drugs, cyclosporin A and FK506. Both drugs form complexes with abundant intracellular binding proteins, cyclosporin A with cyclophilin A and FK506 with FKBP 12, which bind to and inhibit calcineurin. The X-ray structure of an FKPB12-FK506-calcineurin AB ternary complex reveals that FKBP12-FK506 binds in a hydophobic groove between the calcineurin A catalytic and the regulatory B subunit, in accord with biochemical and genetic studies on inhibitor action. Calcineurin plays a key role in regulating the transcription factor NF-AT during T-cell activation, and in mediating responses of microorganisms to cation stress. These findings highlight the potential of yeast genetic studies to define novel drug targets and elucidate conserved elements of signal transduction cascades.