BACKGROUND: The analysis of gene expression using DNA microarrays provides genome wide profiles of the genes controlled by the presence or absence of a specific transcription factor. However, the question arises of whether a change in the level of transcription of a specific gene is caused by the transcription factor acting directly at the promoter of the gene or through regulation of other transcription factors working at the promoter. RESULTS: To address this problem we have devised a computational method that combines microarray expression and site preference data. We have tested this approach by identifying functional targets of the a1-alpha2 complex, which represses haploid-specific genes in the yeast Saccharomyces cerevisiae. Our analysis identified many known or suspected haploid-specific genes that are direct targets of the a1-alpha2 complex, as well as a number of previously uncharacterized targets. We were also able to identify a number of haploid-specific genes which do not appear to be direct targets of the a1-alpha2 complex, as well as a1-alpha2 target sites that do not repress transcription of nearby genes. Our method has a much lower false positive rate when compared to some of the conventional bioinformatic approaches. CONCLUSIONS: These findings show advantages of combining these two forms of data to investigate the mechanism of co-regulation of specific sets of genes.