We examined the genetic system responsible for transcriptional regulation of repressible acid phosphatase (APase; orthophosphoric-monoester phosphohydrolase [acid optimum, EC 3. (7,21,29); and two enzymes, alkaline phosphatase (AlkPase) and polyphosphatase, located in the yeast vacuole, which hydrolyze polyphosphate (7, 9). These enzymes regulate intracellular concentrations of Pi and maintain cellular homeostasis (7, 8) by a cyclic pathway of polyphosphate synthesis and degradation (7). They are themselves regulated by external growth concentrations of Pi (6,7,9,10).This family of enzymes is a dispersed system composed of numerous structural and regulatory genes (Table 1). There are four known structural genes encoding APase (PHO3, PHO5, PHOJO, PHOII), genes for AlkPase (PHO8) and Pi transport (PHO84), and eight genes affecting their expression (9, 23-28). Recessive mutations in PHO4 and PHO81 block the derepression of repressible APase and AlkPase, in addition to Pi uptake (26, 28), whereas recessive mutations in PHO80 and PHO85 result in their constitutive expression. PHO2 mutants lack only the repressible APase (26, 28). PHO6 and PHO7 affect expression of PHO3, the "constitutive" APase (23), and PHO9 encodes a protease involved in AlkPase maturation (9).On the basis of genetic analysis of various double mutants and the discovery of a cis-dominant constitutive mutant (PHO82) contiguous to PH04 (26), Toh-e et al. originally proposed a role for the phosphatase regulatory genes involving transcriptional regulation via the sequential functioning of their products (28), reminiscent of control of phage * Corresponding author.development by repressor and antirepressor proteins. PHO4 was considered to be a positive regulator essential for transcription of PHOS and PHO8. The PHO80 and PHO85 proteins form a repressor under negative control of PHO81.In the presence of Pi, this repressor blocks transcription of PHO4 by binding to an adjacent site pho82. In the absence of P1 it dissociates, allowing for synthesis of PHO4 which, in turn, associates with sites adjacent to PHOS and PHO8 and activates transcription. For APase, this occurs in concert with PHO2 at the pho83 locus adjacent to PHOS.More recent genetic studies, however, are inconsistent with this model. First, fine-structure meiotic mapping situates the pho82 site in a narrow region within the PHO4 locus (22). The existence of temperature-sensitive and nonsense suppressible mutations in PHO4 argues strongly that this locus encodes a protein (22). The fact that two PHO4 sites flank pho82 therefore argues against a model defining the pho82 site as an operator of PHO4. Moreover, APase activity shown by PHO82 PHO4Ipho82 (wild-type) pho4 diploids grown under repressed conditions varied depending on the combination of PHO82 and pho4 alleles, unlike the PHO82 homozygous diploids (22).These findings led Toh-e et al. to propose a new model wherein the regulatory factors function simultaneously by direct molecular interaction (22). In its simplest form, this new model stat...