Cadmium is a toxic heavy metal with no known biological activity. Differential display of mRNA was employed to isolate cDNA corresponding to the transcript that is induced in cadmium-treated Candida sp. In this report we describe the molecular characterization of the CIP1 gene, which was shown to be rapidly induced after cadmium treatment. Northern blot analysis showed that the CIP1 transcript was not present in normal cells, but accumulated at higher levels in cadmium-treated cells. Treatment of other heavy metals such as copper, mercury, lead, zinc, or heat-shock had no effect on the expression of the CIP1 gene. Sequence analysis of CIP1 revealed that it encodes a 32 kDa hydrophobic protein that contains a putative transmembrane domain. The deduced amino acid sequence of CIP1 showed a little homology with isoflavone reductase of plants. From the promoter sequence analysis, we also identified a sequence similar to pas, a cadmium-responsive element of the ParA gene in tobacco. Our results suggest that Candida CIP1 may play a crucial role in the establishment of specific cellular response to stress evolved by the cadmium treatment.