The HO gene product of Saccharomyces cerevisiae is a site-specific endonuclease that initiates mating type interconversion. We have determined the nucleotide sequence of a 3,129-base-pair (bp) segment containing HO. The segment contains a single long open reading frame encoding a polypeptide of 586 amino acids, which has unusual (unbiased) codon usage and is preceded by 762 bp of upstream region. The predicted HO protein is basic (16% lysine and arginine) and is calculated to have a secondary structure that is 30% helical. The corresponding transcript is initiated approximately 50 nucleotides prior to the presumed initiation codon. Insertion of an Escherichia coli lacZ gene fragment into the putative HO coding segment inactivated HO and formed a hybrid HO-lacZ gene whose beta-galactosidase activity was regulated by the mating type locus in the same manner as HO (repressed by a 1-alpha 2). Upstream regions of 1,360 and 762 bp conferred strong repression; 436 bp led to partial constitutivity and 301 bp to full constitutivity. Thus, DNA sequences that confer repression of HO by a1-alpha 2 are at least 250 nucleotides upstream of the transcription start point and are within 436 nucleotides of the HO initiation codon. The progressive loss of repression suggests that both the -762 to -436 and the -436 to -301 intervals contain sites for regulation by a1-alpha 2. The HO gene contains two distinct regions that promote autonomous replication of plasmids in S. cerevisiae. These regions contain sequences that are homologous to the two conserved sequences that are associated with ARS activity.