Yeast strains harboring M1-dsRNA and its packaging virus ScV-L secrete a disulfide-linked, heterodimeric toxin which kills sensitive yeast cells by disrupting plasma membrane function. The mature toxin is derived from a precursor (preprotoxin) which undergoes post-translational processing steps during export via the established yeast secretory pathway. Cleavage by both the KEX1 and KEX2 endopeptidases is required for expression of killing activity. The same 1.0 kb open reading frame on Ml-dsRNA directs the expression of immunity to toxin. Differentially processed derivatives of protoxin, as well as protoxin itself, have been proposed to serve as mediators of immunity. To understand the mechanisms by which the killing and immunity phenotypes can be derived from a common precursor, we have: 1) studied cellular processes implicated in expression of the phenotypes; and 2) developed a system to produce mutants defective in immunity, killing, or both. In the first approach, the role played by both endocytosis and vesicular trafliking in expression of killing and immunity was examined. Strains defective in endocytosis (end1, end2) or vacuolar protein localization (vnp13, vp16) were transformed with a plasmid encoding killer toxin under control of the pho5 promoter. When induced by phosphate starvation, both end mutants and all vpl mutants expressed killing activity. Immunity to exogenous toxin, however, was significantly decreased in strains carrying both vpl mutant alleles and in one of the endocytosis mutants (end1)). This suicidal phenotype (rex for resistance expression) has been described previously in M1-containing strains as a leaky phenocopy. The distinct selective disadvantage of the rex phenotype can be overcome in this system by phosphate-mediated repression of killer toxin expression. In the second approach, a strain carrying the phosphate-repressible copy of the toxin gene was mutagenized with EMS, and survivors were scored for the rex phenotype. A large percentage of the rex mutants isolated also exhibited a vpl phenotype, implying that efficacious sorting of vacuolar proteins may be important for expression of immunity. In contrast, the rex mutants and the wild type REX + strain displayed an END + phenotype which was distinct from that of the end1 and end2 mutant. At the level of stringency of this fluid phase uptake assay, it appears that defective endocytosis is not a common phenotype obtained among independently isolated and viable rex mutants.