Calcineurin is a Ca2+- and calmodulin-dependent protein phosphatase that plays a key role in animal and yeast physiology. In the yeast Saccharomyces cerevisiae, calcineurin is required for survival during several environmental stresses, including high concentrations of Na+, Li+, and Mn2+ ions and alkaline pH. One role of calcineurin under these conditions is to activate gene expression through its regulation of the Crz1p transcription factor. We have identified Hph1p as a novel substrate of calcineurin. HPH1 (YOR324C) and its homolog HPH2 (YAL028W) encode tail-anchored integral membrane proteins that interact with each other in the yeast two-hybrid assay and colocalize to the endoplasmic reticulum. Hph1p and Hph2p serve redundant roles in promoting growth under conditions of high salinity, alkaline pH, and cell wall stress. Calcineurin modifies the distribution of Hph1p within the endoplasmic reticulum and is required for full Hph1p activity in vivo. Furthermore, calcineurin directly dephosphorylates Hph1p and interacts with it through a sequence motif in Hph1p, PVIAVN. This motif is related to calcineurin docking sites in other substrates, such as NFAT and Crz1p, and is required for regulation of Hph1p by calcineurin. In contrast, Hph2p neither interacts with nor is dephosphorylated by calcineurin. Ca2+-induced Crz1p-mediated transcription is unaffected in hph1delta hph2delta mutants, and genetic analyses indicate that HPH1/HPH2 and CRZ1 act in distinct pathways downstream of calcineurin. Thus, Hph1p and Hph2p are components of a novel Ca2+- and calcineurin-regulated response required to promote growth under conditions of high Na+, alkaline pH, and cell wall stress.