Using a scheme for selecting mutants of Saccharomyces cerevisiae with abnormalities of iron metabolism, we have identified a gene, AFT1, that mediates the control of iron uptake. AFT1 encodes a 78 kDa protein with a highly basic amino terminal domain and a glutamine-rich C-terminal domain, reminiscent of transcriptional activators. The protein also contains an amino terminal and a C-terminal region with 10% His residues. A dominant mutant allele of this gene, termed AFT1-1up, results in high levels of ferric reductase and ferrous iron uptake that are not repressed by exogenous iron. The increased iron uptake is associated with enhanced susceptibility to iron toxicity. These effects may be explained by the failure of iron to repress transcription of FRE1, FRE2 and FET3. FRE1 and FRE2 encode plasma membrane ferric reductases, obligatory for ferric iron assimilation, and FET3 encodes a copper-dependent membrane-associated oxidase required for ferrous iron uptake. Conversely, a strain with interruption of the AFT1 gene manifests low ferric reductase and ferrous iron uptake and is susceptible to iron deprivation, because of deficient expression of FRE1 and negligible expression of FRE2 and FET3. Thus, AFT1 functions to activate transcription of target genes in response to iron deprivation and thereby plays a central role in iron homeostasis.