The PUT1 and PUT2 genes encoding the enzymes of the proline utilization pathway of Saccharomyces cerevisiae are induced by proline and activated by the product of the PUT3 gene. Two upstream activation sequences (UASs) in the PUT1 promoter were identified by homology to the PUT2 UAS. Deletion analysis of the two PUT1 UASs showed that they were functionally independent and additive in producing maximal levels of gene expression. The consensus PUT UAS is a 21-base-pair partially palindromic sequence required in vivo for induction of both genes. The results of a gel mobility shift assay demonstrated that the proline-specific UAS is the binding site of a protein factor. In vitro complex formation was observed in crude extracts of yeast strains carrying either a single genomic copy of the PUT3 gene or the cloned PUT3 gene on a 2 microns plasmid, and the binding was dosage dependent. DNA-binding activity was not observed in extracts of strains carrying either a put3 mutation that caused a noninducible (Put-) phenotype or a deletion of the gene. Wild-type levels of complex formation were observed in an extract of a strain carrying an allele of PUT3 that resulted in a constitutive (Put+) phenotype. Extracts from a strain carrying a PUT3-lacZ gene fusion formed two complexes of slower mobility than the wild-type complex. We conclude that the PUT3 product is either a DNA-binding protein or part of a DNA-binding complex that recognizes the UASs of both PUT1 and PUT2. Binding was observed in extracts of a strain grown in the presence or absence of proline, demonstrating the constitutive nature of the DNA-protein interaction.