The role of Saccharomyces cerevisiae Adr1p was examined with respect to the transcriptional regulation of the SPS19 gene encoding the peroxisomal beta-oxidation auxiliary enzyme 2,4-dienoyl-CoA reductase. The SPS19 promoter contains both an oleate response element that binds the Pip2p-Oaf1p transcription factor as well as a canonical Adr1p-binding element, termed UAS1(SPS19). Northern analysis demonstrated that transcriptional up-regulation of SPS19 was abolished in cells devoid of Adr1p. Expression of an SPS19-lacZ reporter gene was shown to be quiescent in the adr1Delta mutant and abnormally elevated in cells containing multiple ADR1 copies. UAS1(SPS19) was able to compete for formation of a specific complex between recombinant Adr1p-LacZ and UAS1(CTA1) representing the corresponding Adr1p-binding element in the promoter of the catalase A gene, and to interact directly with this fusion protein. We conclude that in the presence of fatty acids in the medium transcription of SPS19 is directly regulated by both Pip2p-Oaf1p and Adr1p.