In eukaryotes, the decoding of the UGA codon as selenocysteine (Sec) requires a Sec insertion sequence (SECIS) element in the 3' untranslated region of the mRNA. We purified a SECIS binding protein, SBP2, and obtained a cDNA clone that encodes this activity. SBP2 is a novel protein containing a putative RNA binding domain found in ribosomal proteins and a yeast suppressor of translation termination. By UV cross-linking and immunoprecipitation, we show that SBP2 specifically binds selenoprotein mRNAs both in vitro and in vivo. Using (75)Se-labeled Sec-tRNA(Sec), we developed an in vitro system for analyzing Sec incorporation in which the translation of a selenoprotein mRNA was both SBP2 and SECIS element dependent. Immunodepletion of SBP2 from the lysates abolished Sec insertion, which was restored when recombinant SBP2 was added to the reaction. These results establish that SBP2 is essential for the co-translational insertion of Sec into selenoproteins. We hypothesize that the binding activity of SBP2 may be involved in preventing termination at the UGA/Sec codon.