Upc2p and Ecm22p are a pair of transcription factors responsible for the basal and induced expression of genes encoding enzymes of ergosterol biosynthesis in yeast (ERG genes). Upc2p plays a second role as a regulator of hypoxically expressed genes. Both sterols and heme depend upon molecular oxygen for their synthesis, and thus the levels of both have the potential to act as indicators of the oxygen environment of cells. Hap1p is a heme-dependent transcription factor that both Upc2 and Ecm22p depend upon for basal level expression of ERG genes. However, induction of both ERG genes and the hypoxically expressed DAN/TIR genes by Upc2p and Ecm22p occurred in response to sterol depletion rather than to heme depletion. Indeed, upon sterol depletion, Upc2p no longer required Hap1p to activate ERG genes. Mot3p, a broadly acting repressor/activator protein, was previously shown to repress ERG gene expression, but the mechanism was unclear. We established that Mot3p bound directly to Ecm22p and repressed Ecm22p- but not Upc2p-mediated gene induction.