To further our understanding of how the nucleocytoplasmic transport machinery interfaces with its cargoes and how this affects cellular physiology, we investigated the molecular mechanisms of phenotypes associated with mutations in karyopherin Kap121p. Two previously unreported phenotypes of kap121 cells were observed: defects in mating and in the transition from the normal yeast form to the pseudohyphal, invasive form. In parallel, we searched for Kap121p cargoes by using Kap121p as a probe in overlay assays of yeast nuclear proteins. One of the major interacting proteins identified by this procedure was Ste12p, a transcription factor central to both the mating response and the pseudohyphal transition. We therefore investigated whether defects in these differentiation processes were due to an inability to import Ste12p. Both immunopurification and in vitro binding studies demonstrated that Ste12p interacted specifically with Kap121p in a Ran-GTP-sensitive manner and that Ste12p was mislocalized to the cytoplasm by inactivation of Kap121p in a temperature-sensitive mutant. The Kap121p-specific nuclear localization signal (NLS) of Ste12p was determined to reside within a C-terminal region of Ste12p. Furthermore, by overexpression of STE12 or expression of a STE12-cNLS fusion in kap121 cells, the invasive-growth defect and the mating defect were both suppressed. Together these data demonstrate that Ste12p is imported into nuclei by Kap121p and that mating and differentiation defects associated with kap121 mutants are primarily attributable to the mislocalization of Ste12p.