The fungus Cryptococcus neoformans is an environmental human pathogen which enters the lung via the respiratory tract and produces a unique protein, called antiphagocytic protein 1 (App1), that protects it from phagocytosis by macrophages. In previous studies, we proposed genetic evidences that transcription of APP1 is controlled by the enzymatic reaction catalyzed by inositol phosphorylceramide synthase 1 (Ipc1) via the production of diacylglycerol through the activating transcription factor 2 (Atf2). We investigated here the mechanism by which Atf2 binds to the APP1 promoter in vitro and in vivo. To this end, we produced Atf2 recombinant proteins (rAtf2) and found that rAtf2 binds to ATF cis-acting element present in the APP1 promoter. Indeed, mutation of two key nucleotides in the ATF consensus sequence abolishes the binding of rAtf2 to the APP1 promoter. Next, we produced C. neoformans strains with a hemagglutinin-tagged ATF2 gene and showed that endogenous Atf2 binds to APP1 promoter in vivo. Finally, by a novel DNA protein-binding precipitation assay, we showed that treatment with 1,2-dioctanoylglycerol positively increases binding of Atf2-APP1 promoter in vivo. These studies provide new insights into the molecular mechanism by which Atf2 regulates APP1 transcription in vivo with important implications for a better understanding of how C. neoformans escapes the phagocytic process.