The Saccharomyces cerevisiae transcriptional activator GAL4 is regulated by the presence of available carbon sources. Galactose induces activity by inhibiting the negative regulator GAL80, while glucose, the preferred carbon source, antagonizes GAL4 function by several mechanisms. In the present study we present evidence that one mechanisms for inhibition of GAL transcription by glucose involves direct inhibition of the GAL4 protein. We demonstrate that a large, previously uncharacterized, central region of GAL4 contains at least three 'inhibitory domains' and a 'glucose response domain' (GRD). Deletion of the entire central region eliminates direct inhibition of GAL4 by glucose, and furthermore, fusion of the central region to a heterologous transcriptional activator confers inhibition by glucose. The central region inhibitory domains constitutively inhibit transcriptional activation when the GRD is absent. Direct inhibition of GAL4 activity can be detected within 30 min following glucose addition and may represent an early mechanism promoting a switch from galactose to glucose utilization. A model for the regulatory role of the central region is presented, involving interaction with an additional protein that inhibits GAL4 activity when glucose is present.