The expression of some nuclear genes in Saccharomyces cerevisiae, such as the CIT2 gene, which encodes a glyoxylate cycle isoform of citrate synthase, is responsive to the functional state of mitochondria. Previous studies identified a basic helix-loop-helix-leucine zipper (bHLH/Zip) transcription factor encoded by the RTG1 gene that is required for both basal expression of the CIT2 gene and its increased expression in respiratorydeficient cells. Here, we describe the cloning and characterization of RTG3, a gene encoding a 54-kDa bHLH/ Zip protein that is also required for CIT2 expression. Rtg3p binds together with Rtg1p to two identical sites oriented as inverted repeats 28 bp apart in a regulatory upstream activation sequence element (UAS r ) in the CIT2 promoter. The core binding site for the Rtg1p-Rtg3p heterodimer is 5-GGTCAC-3, which differs from the canonical E-box site, CANNTG, to which most other bHLH proteins bind. We demonstrate that both of the Rtg1p-Rtg3p binding sites in the UAS r element are required in vivo and act synergistically for CIT2 expression. The basic region of Rtg3p conforms well to the basic region of most bHLH proteins, whereas the basic region of Rtg1p does not. These findings suggest that the Rtg1p-Rtg3p complex interacts in a novel way with its DNA target sites.Cells of the yeast Saccharomyces cerevisiae are able to monitor and respond to changes in mitochondrial function through accommodating changes in nuclear gene expression (26). We have referred to this process as retrograde regulation, which can be thought of as a stress response to mitochondrial dysfunctions (reviewed by Shyjan and Butow [36]). One example of retrograde regulation is the elevated expression of the CIT2 gene in response to various mitochondrial lesions (17). CIT2 encodes a peroxisomal isoform of citrate synthase (CS2) (15, 21) that functions in the glyoxylate cycle. CS2 has 83% sequence similarity with the tricarboxylic acid (TCA) cycle isoform of citrate synthase, CS1, encoded by the CIT1 gene. Various mitochondrial lesions, such as a block in the TCA cycle or the loss of mitochondrial DNA, result in a transcriptional activation of CIT2 anywhere from 2-to 30-fold. This activation is dependent, in part, on the kind mitochondrial defect (4, 17). We have suggested that the corresponding increases in CS2 activity could compensate for decreases in TCA cycle activity (17) through the known metabolic interactions between the glyoxylate and TCA cycles (38).We have identified two genes, RTG1 and RTG2, that are central to this novel signaling pathway (16). Each is required for basal as well as retrograde-regulated CIT2 expression. Surprisingly, both RTG1 and RTG2 are also essential for peroxisome proliferation (4, 13), which can be induced in yeast cells by the presence of oleic acid in the growth medium (14,37,40). RTG1 and RTG2 are also required for the oleic acid-dependent increase in expression of POX genes (encoding enzymes of the -oxidation pathway) and PMP27, which encodes a protein associated with peroxisoma...