ACE1 is the transcriptional activator of the metallothionein (CUP1 locus) gene in Saccharomyces cerevisiae. Previous data had implicated the N-terminal domain of ACE1 as responsible for the Cu-dependent specific DNA binding. An expression system in Escherichia coli was constructed to enable the isolation of an ACE1 domain containing the DNA and Cu-binding regions. Here we report the purification and characterization of the Cu-ACE1 truncated molecule. Spectroscopic techniques showed that ACE1 contains an unusual type of DNA binding structure that is based on a polynuclear Cu(I)-cysteinyl thiolate cluster. The cluster consists of six or seven Cu(I) ions coordinated to cysteinyl thiolates in a trigonal geometry distorted from planarity. The Cu(I)-cysteine cluster of Cu-ACE1 exhibits structural properties analogous to the Cu(I)-thiolate polynuclear cluster in yeast Cu-metallothionein itself, suggesting an unusual mechanism for the evolution of this regulatory factor. The Cu cluster organizes and stabilizes the conformation of the N-terminal domain of ACE1 for specific DNA binding.