The Saccharomyces cerevisiae Na(+)/H(+) antiporter Nha1p has a two-domain structure consisting of an N-terminal integral membrane region and a C-terminal cytoplasmic region. We previously identified six distinct cytoplasmic domains (C1-C6) conserved among yeast species and here we performed detailed structure-function analysis of the C1 domain (16 residues). Deletion of the C1 domain causes extensive inhibition of cell-growth under high salinity conditions. Mutants with single residue deletions or various amino acid substitutions affecting the C1 domain were analyzed with respect to salinity-dependent growth and Nha1p localization. The C1 domain was found to consist of two subdomains: (i) The first three N-proximal residues, which in conjunction with the integral membrane region play a crucial role in the targeting of Nha1p to the cytoplasmic membrane, and (ii) the portion between Leu-439 and Thr-449, which is not required for localization, but in which four residues (Gly-440, Arg-441, His-442, and Ile-446) affect salinity-sensitive cell-growth by possibly influencing the antiporter activity. Based on the overall similarity of the two-domain structure of Nha1p to that of mammalian Na(+)/H(+) antiporters, the functional importance of domains proximal to the membrane region is discussed.