CAP1 encodes a basic region-leucine zipper (bZip) transcriptional regulatory protein that is required for oxidative stress tolerance in Candida albicans. Cap1p is a homologue of a Saccharomyces cerevisiae bZip transcription factor designated Yap1p that is both required for oxidative stress tolerance and localized to the nucleus in response to the presence of oxidants. Oxidant-regulated localization of Yap1p to the nucleus requires the presence of a carboxy-terminal cysteine residue (C629) that is conserved in Cap1p as C477. To examine the role of this conserved cysteine residue, C477 was replaced with an alanine residue. This mutant protein, C477A Cap1p, was analysed for its behaviour both in S. cerevisiae and C. albicans. Wild type and C477A Cap1p were able to complement the oxidant hypersensitivity of a Deltayap1 S. cerevisiae strain. Whereas a Yap1p-responsive lacZ fusion gene was oxidant inducible in the presence of YAP1, the C. albicans Cap1p derivatives were not oxidant responsive in S. cerevisiae. Introduction of wild type and C477A Cap1p-expressing plasmids into C. albicans produced differential resistance to oxidants. Glutathione reductase activity was found to be inducible by oxidants in the presence of Cap1p but was constitutively elevated in the presence of C477A Cap1p. Western blot assays indicate Cap1p is post-translationally regulated by oxidants. Green fluorescent protein fusions to CAP1 showed that this protein is localized to the nucleus only in the presence of oxidants while C477A Cap1p is constitutively nuclear localized. Directly analogous to S. cerevisiae Yap1p, regulated nuclear localization of C. albicans Cap1p is crucial for its normal function.