The gene encoding the galactose permease of Saccharomyces cerevisiae (GAL2) was cloned. The clone restores galactose permease activity to gal2 yeasts and is regulated by galactose in a manner similar to other GAL gene products (GAL1, -7, and -10). Experiments with temperature-conditional secretory mutants indicated that transport of the GAL2 gene product to the cell surface requires a functional secretory pathway. In addition, gene fusions were constructed between the GAL2 gene and the Escherichia coli lacZ gene. The GAL2-lacZ gene fusions code for galactose-regulated beta-galactosidase activity in yeasts. The beta-galactosidase activity was found to be membrane bound.