A family of highly-conserved 70 kDa stress proteins is localized in various intracellular compartments of Saccharomyces cerevisiae. Their gene expression is specifically and/or sometimes cooperatively regulated at the transcriptional level by cis-acting elements found in their respective promoters. Here, we find that depletion of cytosolic Ssa1p induced BiP(Kar2p) in the endoplasmic reticulum at the transcriptional level. By analyzing internal deletion mutants of the KAR2 promoter, we determined that the heat shock element (HSE) is necessary for KAR2 gene induction in response to the depletion of Ssa1p. Furthermore, either the KAR2HSE or SSA1HSE is sufficient for gene activation, as assayed using HSE-CYC1-lacZ fusion reporter plasmids. Finally, temperature-sensitive ssa1 mutants transformed with an HSE-CYC1-lacZ fusion vector exhibited strong induction of beta-galactosidase activity when shifted to a restrictive temperature. These results show that loss of functional Ssa1p from the cytosol up-regulates KAR2 gene expression through an HSE-mediated pathway and also support the idea that SSA1 gene expression is autoregulated.