When electron flow through the cytochrome-mediated electron transport chain is blocked by inhibitors or mutations, the mitochondria of Neurospora crassa contain a KCN-insensitive alternative oxidase, encoded by the aod-1 gene, that transfers electrons directly from the ubiquinone pool to oxygen. The mechanism by which the enzyme is induced is unknown. Comparison of the sequence upstream of the N. crassa aod-1 gene with the corresponding region of Gelasinospora spp. and Aspergillus nidulans revealed a cyclic AMP responsive element (CRE) about 700-800 bp upstream of the start codon in each species. Electrophoretic mobility shift assays showed that a factor from N. crassa cell extracts binds specifically to the CRE sequence. However, transformation of an aod-1 mutant strain with constructs lacking the CRE gave strains that regulate alternative oxidase in a normal fashion. Nuclear run-on assays indicated that uninduced cells transcribe the aod-1 gene at a low constitutive rate and that the transcription rate is increased in cells induced by antimycin A. Non-induced wild-type cultures occasionally contained significant amounts of aod-1 mRNA, but Western blots revealed no detectable AOD1 protein in mitochondria of these cells. This suggests that post-transcriptional events also play a role in alternative oxidase expression. A BLAST search of the Neurospora genome sequence revealed a second gene with the potential to encode an alternative oxidase, which we have named aod-3. Northern blot analysis using probes specific for the aod-1 and aod-3 genes revealed no evidence of expression of aod-3.