Modern biological scientists employ numerous approaches for solving their problems. Among these approaches, the gene fusion is surely one of the well-established valuable tools in various fields of biological sciences. A wide range of applications have been developed to analyze a variety of biological phenomena such as transcriptional regulation, pre-mRNA processing, mRNA decay, translation, protein localization and even protein transport in both prokaryotic and eukaryotic organisms. Gene fusions were also used for the study of protein purification, protein structure, protein folding, protein-protein interaction and protein-DNA interaction. Here, we describe applications of gene fusion technology using the Saccharomyces cerevisiae PHO5 gene encoding repressible acid phosphatase to molecular genetics and biotechnology in S. cerevisiae. Using the PHO5 gene fusion as a reporter, we have identified several cis- and trans-acting genes of S. cerevisiae which are involved in splicing of pre-mRNA, biosynthesis of amino acids, ubiquitin-dependent protein degradation, signal transduction of oxygen and unsaturated fatty acid, regulation of transcription by the nucleosome and chromatin. The PHO5 gene fusions exhibiting the mating-type specific expression were also generated to develop a breeding technique for industrial yeast. It is concluded that the PHO5 gene fusion is extremely useful and should be further exploited to investigate various cellular steps of the eukaryotic gene expression.