Sugar signaling is a mechanism that plants use to integrate various internal and external cues to achieve nutrient homeostasis, mediate developmental programs, and articulate stress responses. Many bZIP transcription factors are known to be involved in nutrient and/or stress signaling. An Arabidopsis S1-group bZIP gene, AtbZIP1, was identified as a sugar-sensitive gene in a previous gene expression profiling study (Plant Cell. 16, 2128-2150). In this report, we show that the expression of AtbZIP1 is repressed by sugars in a fast, sensitive, and reversible way. The sugar repression of AtbZIP1 is affected by a conserved sugar signaling component, hexokinase. Besides being a sugar-regulated gene, AtbZIP1 can mediate sugar signaling and affect gene expression, plant growth, and development. When carbon nutrients are limited, gain or loss of function of AtbZIP1 causes changes in the rates of early seedling establishment. Results of phenotypic analyses indicate that AtbZIP1 acts as a negative regulator of early seedling growth. Using gain- and loss-of-function plants in a microarray analysis, two sets of putative AtbZIP1-regulated genes have been identified. Among them, sugar-responsive genes are highly over-represented, implicating a role of AtbZIP1 in sugar-mediated gene expression. Using yeast two-hybrid (Y-2-H) screens and bimolecular fluorescence complementation (BiFC) analyses, we are able to recapitulate extensive C/S1 AtbZIP protein interacting network in living cells. Finally, we show that AtbZIP1 can bind ACGT-based motifs in vitro and that the binding characteristics appear to be affected by the heterodimerization between AtbZIP1 and the C-group AtbZIPs, including AtbZIP10 and AtbZIP63.