Fidelity in DNA replication and repair requires adequate and balanced deoxyribonucleotide pools that are maintained primarily by regulation of ribonucleotide reductase (RNR). RNR is controlled via transcription, protein inhibitor association, and subcellular localization of its two subunits, R1 and R2. Saccharomyces cerevisiae Sml1 binds R1 and inhibits its activity, while Schizosaccharomyces pombe Spd1 impedes RNR holoenzyme formation by sequestering R2 in the nucleus away from the cytoplasmic R1. Here we report the identification and characterization of S. cerevisiae Dif1, a regulator of R2 nuclear localization and member of a new family of proteins sharing separate homologous domains with Spd1 and Sml1. Dif1 is localized in the cytoplasm and acts in a pathway different from the nuclear R2-anchoring protein Wtm1. Like Sml1 and Spd1, Dif1 is phosphorylated and degraded in cells encountering DNA damage, thereby relieving inhibition of RNR. A shared domain between Sml1 and Dif1 controls checkpoint kinase-mediated phosphorylation and degradation of the two proteins. Abolishing Dif1 phosphorylation stabilizes the protein and delays damage-induced nucleus-to-cytoplasm redistribution of R2. This study suggests that Dif1 is required for nuclear import of the R2 subunit and plays an essential role in regulating the dynamic RNR subcellular localization.