A tobacco cDNA (NtSLT1, for Nicotiana tabacum sodium- and lithium-tolerant) was isolated by functional complementation of the salt-sensitive phenotype of a calcineurin (CaN)-deficient yeast mutant (cnb delta, regulatory subunit null). CaN is a Ca2+/calmodulin-dependent type 2B protein phosphatase that regulates Na+ homeostasis in yeast. This phosphatase modulates plasma membrane K+/Na+ selectivity through the activation of high-affinity K+ transport, and increaseses extracellular Na+ efflux by activation and transcriptional induction of the Na+/Li+ translocating P-type ATPase encoded by ENA1. Expression of N-terminally truncated NtSLT1 (Met-304), but not full-length protein, suppressed salt sensitivity of cnb1. Truncated NtSLT1 also increased salt tolerance of wild-type yeast, indicating functional sufficiency. NtSLT1 encodes a protein of yet unknown function but experimentation in yeast confirms it as a salt tolerance determinant. The Arabidopsis thaliana orthologue, AtSLT1, also suppressed salt sensitivity of cnb delta but only when expressed without the N-terminus (Met-301), suggesting that this region of the proteins from these evolutionarily diverse plant species contains an autoinhibitory domain. NtSLT1 enhanced transcription of the CaN-dependent ENA1 gene promoter and compensated the salt sensitivity of a mutant deficient in TCN1--a transcription factor that is activated by CaN and then induces ENA1 expression. NtSLT1 partially suppressed the salt sensitivity of ena1-4 indicating that NtSLT1 has both ENA-dependent and independent functions. NtSLT1 suppressed spk1 hal4 (SPK1/HAL4 which encodes a serine-threonine kinase that regulates TRK1-2 transporters to have high K+/Na+ selectivity) but not ena1-4 trk1-2 implicating the ENA-independent function to be through TRK1-2. Together, these results implicate SLT1 as a signal regulatory molecule that mediates salt tolerance by modulating Na+ homeostasis.