The RNR2 gene encodes the small subunit of ribonucleotide reductase, the enzyme that catalyzes the first step in the pathway for the production of the deoxyribonucleotides needed for DNA synthesis. Transcription of this gene is induced approximately 20-fold in response to environmental stimuli that damage DNA or block DNA replication. Deletion and subcloning analysis identified two, and possibly three, upstream activating sequences (UAS) and one repressing (URS) element in the RNR2 regulatory region. A 42-base-pair (bp) fragment from this region was found to be necessary for proper regulation of RNR2 and to be capable of conferring DNA damage inducibility upon a heterologous promoter. This fragment contained both positively and negatively acting sequences. Four DNA-binding factors interacted with the RNR2 regulatory region. One factor was identified as the GRF1 protein, the product of the RAP1 gene. GRF1 bound to the UAS2 element of RNR2, which was found to be directly adjacent to the 42-bp fragment. UAS2 activity was repressed by the 42-bp fragment. Three other factors bound to the 42-bp fragment; one of these factors, RRF3, had a second binding site in the RNR2 promoter. These factors are likely to mediate the response of RNR2 to DNA damage.