Heme oxygenase‐1 (HO‐1) protects cells from various insults including oxidative stress. Transcriptional activators, including the Nrf2/Maf heterodimer, have been the focus of studies on the inducible expression of ho‐1. Here we show that a heme‐binding factor, Bach1, is a critical physiological repressor of ho‐1. Bach1 bound to the multiple Maf recognition elements (MAREs) of ho‐1 enhancers with MafK in vitro and repressed their activity in vivo, while heme abrogated this repressor function of Bach1 by inhibiting its binding to the ho‐1 enhancers. Gene targeting experiments in mice revealed that, in the absence of Bach1, ho‐1 became expressed constitutively at high levels in various tissues under normal physiological conditions. By analyzing bach1/nrf2 compound‐deficient mice, we documented antagonistic activities of Bach1 and Nrf2 in several tissues. Chromatin immunoprecipitation revealed that small Maf proteins participate in both repression and activation of ho‐1. Thus, regulation of ho‐1 involves a direct sensing of heme levels by Bach1 (by analogy to lac repressor sensitivity to lactose), generating a simple feedback loop whereby the substrate effects repressor–activator antagonism.