Yeast cadmium factor (Ycf1), an ATP-binding cassette (ABC) protein of the multidrug resistance protein subfamily, is a vacuolar GS-conjugate transporter required for heavy metal and drug detoxification. There is evidence that phosphorylation may play a critical role in the function of ABC transporters from higher organisms. In this work, the possibility of Ycf1 phosphorylation was examined using site-directed mutagenesis. We demonstrate that Ser908 and Thr911, within the regulatory domain (R domain), are functionally important for Ycf1 transport activity and likely sites for phosphorylation. Mutation of these residues to alanine severely impaired the Ycf1-dependent cadmium detoxification capacity and transport activity, while replacement by acidic residues (mimicking phosphorylation) significantly suppressed the cadmium resistance and transport defects. Both in vitro treatment of Ycf1 with alkaline phosphatase and changes in the electrophoretic mobility of the S908A, T911A and double mutant S908A/T911A proteins supported the conclusion that Ycf1 is a phosphoprotein. The screening of the yeast kinome identified four protein kinases affecting cadmium detoxification, but none of them was involved directly in the phosphorylation of Ycf1. Our data strongly implicate Ycf1 phosphorylation as a key determinant in cadmium resistance in yeast, a significant finding given that very little is known about phosphorylation of ABC transporters in yeast.