The yeast transcription factors Ace2p and Swi5p regulate the expression of several target genes involved in mating type switching, exit from mitosis and cell wall function. We describe the analysis of 12 novel targets, some regulated by Ace2p or Swi5p alone and some by both. We show that Ace2p is the major regulator of four genes (CTS1, YHR143W, SCW11 and YER124C). Expression of all four is inhibited by Swi5p. Like Cts1p and Scw11p, the two new Ace2p targets are associated with cell wall metabolism. Yhr143p is localized to the cell wall, and deletion affects cell separation and enhances pseudohyphal growth. Deleting YER124C also affects cell separation and sensitivity to drugs targeted against the cell wall. Expression of PIR1, YPL158C and YNL046W is dependent on Swi5p alone. In contrast, expression of YBR158W, YNL078W and YOR264W is minimized when both ace2 and swi5 are disrupted. We propose that, although Ace2p and Swi5p co-operate to induce the expression of a subset of genes, some functional divergence has occurred. This results in a delay in the expression of those genes predominantly regulated by Ace2p, compared with those predominantly regulated by Swi5p.