We have identified the product of the NIL2 gene of Saccharomyces cerevisiae which contains a zinc finger region highly homologous to those of the GATA factors Gln3p and Nil1p as an antagonist of Nil1p and to a lesser extent of Gln3p. The expression of many nitrogen-regulated genes of Saccharomyces cerevisiae requires activation by GATA factor Gln3p or Nil1p and is prevented by the presence of glutamine in the growth medium. Disruption of NIL2 results in a great increase in the expression of NIL1 and of GAP1, the structural gene for the general amino acid permease, in glutamine-grown cells in response to activation by Nil1p. The primary effect of the elimination of Nil2p appears to be an increase in the intracellular level of Nil1p, which in turn is responsible for increased expression of GAP1. Experiments using an artificial UAS (upstream activating site) consisting of three GATAAGATAAG sites revealed that Nil2p exerts its effect by competing primarily with Nil1p and less effectively with Gln3p for these sites. Apparently, the principal role of Nil2p is to prevent activation of transcription by Nil1p unless Nil1p has been converted to a more active state by the absence of glutamine and glutamate.It is now well established that the expression of many genes of Saccharomyces cerevisiae whose products are responsible for the utilization of different nitrogen compounds as sources of nitrogen is activated by two zinc finger proteins that recognize the sequence GATAAG located upstream of these genes (4,5,16,21,23,25). One of these activators is the product of the GLN3 gene, and its ability to activate transcription is opposed by the product of the URE2 gene in response to an increase in the intracellular level of glutamine (2,6,7,13,19,21). The other activator, the product of NIL1 (also called GAT1) has a zinc finger highly homologous to that of Gln3p and is capable of activating some of the same promoters as Gln3p, but its activity appears to be antagonized by an as yet unknown protein in response to the rise in the intracellular concentration of glutamate (5, 25). As a result, transcription of a susceptible gene such as GAP1, coding for the general amino acid permease, is activated almost exclusively by Gln3p during growth with glutamate as the source of nitrogen and almost exclusively by Nil1p during growth with ammonia or urea as the source of nitrogen and is not activated at all during growth in a medium containing glutamine (25).In addition to possessing homologous zinc fingers, Gln3p and Nil1p also resemble one another by possessing highly acidic amino-terminal domains, characteristic of many activators (25). Two other proteins also possess zinc fingers with high homology to those of Gln3p and Nil1p, but they lack the acidic amino-terminal portions (8,25). One of these proteins, the product of DAL80, has been identified as an antagonist of Gln3p in the case of some, but not all, Gln3p-dependent genes (10, 12). Apparently, Dal80p requires two GATAAG sequences located not more than 20 bp apart to be effective (9)....