Transcription of the Saccharomyces cerevisiae vitamin H transporter gene VHT1 is enhanced by low extracellular biotin. Here we present the identification and characterization of Vhr1p as a transcriptional regulator of VHT1 (VHR1 (YIL056w); VHT1 regulator 1) and the identification of the cis-regulatory target sequences for Vhr1p in two yeast promoters. VHR1 was identified in a complementation screening of mutagenized yeast cells that had lost the capacity to express the gene of the green fluorescent protein (GFP) from the VHT1 promoter. Deltavhr1 deletion mutants fail to induce VHT1 on low biotin concentrations. In yeast one-hybrid analyses performed with fusions of Vhr1p N-terminal and C-terminal fragments to the Gal4p activation domain or to the Gal4p DNA-binding domain, the Vhr1p N terminus mediated biotin-dependent DNA binding, and the Vhr1p C terminus triggered biotin-dependent transcriptional activation. The analyzed Vhr1p N-terminal fragment has previously been described as a domain of unknown function (DUF352). Deletion and linker scanning analyses of the VHT1 promoter revealed the palindromic 18-nucleotide sequence AATCA-N8-TGAYT as the vitamin H-responsive element. This sequence was identified also in the BIO5 promoter that is also transcriptionally activated on low biotin concentrations. Bio5p mediates the transport of 7-keto-8-aminopelargonic acid across the yeast plasma membrane, a compound that is used as a precursor in biotin biosynthesis. Deltavhr1 deletion mutants fail to induce BIO5 on low biotin concentrations. The presented data characterize Vhr1p as an essential component of the biotin-dependent signal transduction cascade in yeast.