Yeast cells can select bud sites in either of two distinct spatial patterns. a cells and alpha cells typically bud in an axial pattern, in which both mother and daughter cells form new buds adjacent to the preceding division site. In contrast, a/alpha cells typically bud in a bipolar pattern, in which new buds can form at either pole of the cell. The BUD3 gene is specifically required for the axial pattern of budding: mutations of BUD3 (including a deletion) affect the axial pattern but not the bipolar pattern. The sequence of BUD3 predicts a product (Bud3p) of 1635 amino acids with no strong or instructive similarities to previously known proteins. However, immunofluorescence localization of Bud3p has revealed that it assembles in an apparent double ring encircling the mother-bud neck shortly after the mitotic spindle forms. The Bud3p structure at the neck persists until cytokinesis, when it splits to yield a single ring of Bud3p marking the division site on each of the two progeny cells. These single rings remain for much of the ensuing unbudded phase and then disassemble. The Bud3p rings are indistinguishable from those of the neck filament-associated proteins (Cdc3p, Cdc10p, Cdc11p, and Cdc12p), except that the latter proteins assemble before bud emergence and remain in place for the duration of the cell cycle. Upon shift of a temperature-sensitive cdc12 mutant to restrictive temperature, localization of both Bud3p and the neck filament-associated proteins is rapidly lost. In addition, a haploid cdc11 mutant loses its axial-budding pattern upon shift to restrictive temperature. Taken together, the data suggest that Bud3p and the neck filaments are linked in a cycle in which each controls the position of the other's assembly: Bud3p assembles onto the neck filaments in one cell cycle to mark the site for axial budding (including assembly of the new ring of neck filaments) in the next cell cycle. As the expression and localization of Bud3p are similar in a, alpha, and a/alpha cells, additional regulation must exist such that Bud3p restricts the position of bud formation in a and alpha cells but not in a/alpha cells.