Galactose-inducible genes (GAL genes) in yeast Saccharomyces cerevisiae are efficiently transcribed only when the sequence-specific transcription activator Gal4p is activated. Activation of Gal4p requires the interaction between the Gal4p inhibitory protein Gal80p and the galactokinase paralog, Gal3p. It has been proposed that Gal3p binds to a Gal80p-Gal4p complex in the nucleus to activate Gal4p. Here, we present evidence that the Gal3p-Gal80p interaction occurs in the cytoplasm, and concurrently, Gal80p is removed from Gal4p at the GAL gene promoter. We also show that GAL gene expression can be activated by heterologous protein-protein interaction in the cytoplasm that is independent of galactose and Gal3p function. These results indicate that galactose-triggered Gal3p-Gal80p association in the cytoplasm activates Gal4p in the nucleus.