The KlICL1 gene, encoding isocitrate lyase in Kluyveromyces lactis, is essential for ethanol utilization. Deletion analyses identified two functional promoter elements, CSRE-A and CSRE-B. Transcription is activated on ethanol, but not on glucose, glycerol or lactate. Expression depends on the KlCat8p transcription factor and KlSip4p binds to the promoter elements. Glycerol diminishes KlICL1 expression and a single carbon source responsive element (CSRE) sequence is both necessary and sufficient to mediate this regulation. The glycerol effect is less pronounced in Saccharomyces cerevisiae than in K. lactis. Mutants lacking KlGUT2 (which encodes the glycerol 3-phosphate dehydrogenase) still show reduced expression in glycerol, whereas mutants deficient in glycerol kinase (Klgut1) do not. We conclude that a metabolite of glycerol is required for this regulation.