In the yeast Saccharomyces cerevisiae, the interplay between Gal3p, Gal80p and Gal4p determines the transcriptional status of the genes needed for galactose utilization. The interaction between Gal80p and Gal4p has been studied in great detail; however, our understanding of the mechanism of Gal3p in transducing the signal from galactose to Gal4p has only begun to emerge recently. Historically, Gal3p was believed to be an enzyme (catalytic model) that converts galactose to an inducer or co-inducer, which was thought to interact with GAL80p, the repressor of the system. However, recent genetic analyses indicate an alternative 'protein-protein interaction model'. According to this model, Gal3p is activated by galactose, which leads to its interaction with Gal80p. Biochemical and genetic experiments that support this model provided new insights into how Gal3p interacts with the Gal80p-Gal4p complex, alleviates the repression of Gal80p and thus allows Gal4p to activate transcription. Recently, a galactose-independent signal was suggested to co-ordinate the induction of GAL genes with the energy status of the cell.