Polo-like kinase Cdc5 and Cdc14 phosphatase are essential for mitotic exit in budding yeast. Cdc14 sequestered in the nucleolus by forming a complex with Net1, a nucleolar inhibitor of Cdc14, is activated after the release from the nucleolus and Cdc5 is essential for this release. Here we show that Cdc5 affects the phosphorylation state of Net1. Tab6 is a dominant active form of Cdc14. We found that Tab6 was released from the nucleolus of cdc5 mutant cells in a cell cycle dependent manner and that the release of Tab6 (or Cdc14) was not sufficient for the cdc5 mutant to grow at a higher temperature, Altogether, we propose that Cdc5 acts to reduce affinity between Cdc14 and Net1 and that the timing of Cdc14 release is independent of Cdc5. We also provide evidence that the critical function of Cdc5, other than Cdc14 liberation, exists in late mitotic events. (C) 2002 Elsevier Science (USA). All rights reserved.