Reliable identification and assignment of cis-regulatory elements in promoter regions is a challenging problem in biology. The sophistication of transcriptional regulation in higher eukaryotes, particularly in metazoans, could be an important factor contributing to their organismal complexity. Here we present an integrated approach where networks of co-expressed genes are combined with gene ontology-derived functional networks to discover clusters of genes that share both similar expression patterns and functions. Regulatory elements are identified in the promoter regions of these gene clusters using a Gibbs sampling algorithm implemented in the A-GLAM software package. Using this approach, we analyze the cell-cycle co-expression network of the yeast Saccharomyces cerevisiae, showing that this approach correctly identifies cis-regulatory elements present in clusters of co-expressed genes.