Zds1 regulates PP2A(Cdc55) activity and Cdc14 activation during mitotic exit through its Zds_C motif.

At anaphase onset, highly active mitotic cyclin-dependent kinase (Cdk) is inactivated to promote exit from mitosis and completion of cytokinesis. The budding yeast Cdc14p phosphatase is a key mitotic regulator that counteracts cyclin-dependent kinase (Cdk) activity during mitotic exit. Separase, together with Zds1p, promotes the downregulation of the protein phosphatase 2A in conjunction with its Cdc55p regulatory subunit (PP2A(Cdc55)) in early anaphase, enabling accumulation of phosphorylated forms of Net1p and release of Cdc14p from the nucleolus. Here we show that the C-terminal domain of Zds1p, called the Zds_C motif, is required for Zds1-induced release of Cdc14p, and the N-terminal domain of the protein might be involved in regulating this activity. More interestingly, Zds1p physically interacts with Cdc55p, and regulates its localization through the Zds_C motif. Nevertheless, expression of the Zds_C motif at endogenous levels cannot induce timely release of Cdc14p from the nucleolus, despite the proper (nucleolar) localization of Cdc55p. Our results suggest that the activity of PP2A(Cdc55) cannot be modulated solely through regulation of its localization, and that an additional regulatory step is probably required. These results suggest that Zds1p recruits PP2A(Cdc55) to the nucleolus and induces its inactivation by an unknown mechanism.