The yeast regulatory gene CAT3 has an essential function for the depression of several glucose-repressible enzymes. Therefore, cat3 mutants are unable to grow on maltose or on non-fermentable carbon sources. Unlike the point mutants isolated previously, cat3 null allele strains also failed to utilize raffinose or galactose as sole carbon sources. Sequencing of an 1.6-kb HindIII-BglII fragment complementing cat3 mutations revealed an open reading frame of 322 codons, size of which is in good agreement with the 1.3-kb size of mRNA. No significant similarities with previously sequenced genes could be detected. CAT3-lacZ fusions confirmed the proposed reading frame. A CAT3-lacZ fusion encoding 307 amino acids of CAT3 was able to complement the growth defects of cat3 point mutants and null allele strains. Assay of beta-galactosidase activity under different growth conditions indicated a constitutive expression of the CAT3 gene product. Cellular fractionation studies showed the nuclear localization of the CAT3 protein.