Abstract: A previous bioinformatics study identified a putative PY-NLS in the yeast transcription factor Tfg2p (1). In this study, we validate Tfg2p as a Kap104p substrate and examine the energetic organization of its PY-NLS. The Tfg2p PY-NLS can target a heterologous protein into the cell nucleus through interactions with Kap104p. Surprisingly, full length Tfg2p is still localized to the nucleus of Kap104p temperature sensitive cells and similarly, Tfg2p with a mutated PY-NLS is nuclear in wild type cells. Other Kapsss such as Kap108p and Kap120p also bind Tfg2p and may import it into the nucleus. More importantly, we demonstrate that Tfg2p is retained in the nucleus through DNA binding. Mutations of DNA binding residues relieve nuclear retention and unmask the role of Kap104p in Tfg2p nuclear import. More generally, steady state localization of a nuclear protein is dictated by its nuclear import and export activities as well as its interactions in the nucleus and the cytoplasm.