The CHA1 gene of Saccharomyces cerevisiae encodes the catabolic L-serine (L-threonine) deaminase responsible for the utilization of serine/threonine as nitrogen sources. Previously, we identified two serine/threonine response elements in the CHA1 promoter, UASCHA. We report isolation of a mutation, cha4-1, that impairs serine/threonine induction of CHA1 transcription. The cha4-1 allele causes noninducibility of a CHA1 p-lacZ translational gene fusion, indicating that Cha4p exerts its action through the CHA1 promoter. Molecular and genetic mapping positioned the cha4 locus 17 cM centromere proximal to put1 on chromosome XII. The coding region of CHA4 predicts a 648-amino acid protein with a DNA-binding motif (residues 43-70) belonging to the Cys6 zinc cluster class. Gel retardation employing a recombinant peptide, Cha4p1-174, demonstrated that the peptide in vitro specifically binds UASCHA. Binding is abolished by a G-C to T-A mutation in the middle bases of the two CEZ-elements in UASCHA. The transcriptional activating ability of UASCHA derivatives in vivo correlates with their ability to bind Cha4p1-174 in vitro. We conclude that Cha4p is a positive regulator of CHA1 transcription and that Cha4p alone, or as part of a complex, is binding UASCHA.