Induction of the arginase (CAR1) gene expression in Saccharomyces cerevisiae has previously been shown to require participation of a cis-dominantly regulated upstream repression sequence (URS). Deletion of this element results in high-level expression of the CAR1 gene without inducer. To determine the structure of the CAR1 URS element, we performed a saturation mutagenesis. Results of the mutagenic analysis indicated that the CAR1 URS was a 9-base-pair palindromic sequence, 5'-AGCCGCCGA-3'. A DNA fragment containing this sequence was shown to bind one or more proteins by a gel shift assay. DNA fragments containing point mutations that completely eliminated URS function were not effective competitors in this assay, whereas those which supported URS function were effective competitors. Sequences in the 5'-flanking regions of 14 other genes were found to be homologous to the CAR1 URS. These sequences were shown to support varying degrees of URS function in the expression vector assay, to bind protein as demonstrated by the gel shift assay, and to compete with a DNA fragment containing the CAR1 URS for protein binding. These results indicate that the CAR1 URS element possesses the characteristics of a repressor binding site. Further, they are consistent with the suggestion that sites homologous to the CAR1 URS may be situated in the 5'-flanking regions of multiple unrelated yeast genes. The widespread occurrence of this element raises the possibility that it is the target site for one or more negatively acting general transcription factors.