The 5' regulatory region of the amdS gene of Aspergillus nidulans, which encodes an acetamidase required for growth on acetamide as a carbon and nitrogen source, contains a CCAAT sequence which is required for setting the basal level of amdS expression. Mobility shift studies have identified a factor in A. nidulans nuclear extracts which binds to this CCAAT sequence. In Saccharomyces cerevisiae the HAP3 gene encodes one component of a multisubunit complex that binds CCAAT sequences. A search of the EMBL and SwissProt databases has revealed an A. nidulans sequence with significant homology to the HAP3 gene adjacent to the previously cloned regulatory gene amdR. Sequencing of the remainder of this region has confirmed the presence of a gene, designated hapC, with extensive homology to HAP3. The predicted amino acid sequence of HapC shows extensive identity to HAP3 in the central conserved domain, but shows little conservation in the flanking sequences. A haploid carrying a hapC deletion has been created and is viable, but grows poorly on all media tested. This null mutant grows especially slowly on acetamide as a sole carbon and nitrogen source, indicating that hapC plays a role in amdS expression. In agreement with this notion, it has been shown that the hapC deletion results in reduced levels of expression of an amdS::lacZ reporter gene and this effect is particularly evident under conditions of carbon limitation. Nuclear extracts prepared from the hapC deletion mutant show no CCAAT binding activity to the amdS or gatA promoters, indicating that hapC may encode a component of the complex binding at this sequence.