It is well known that the accumulation of an unfolded protein in the endoplasmic reticulum (ER) initiates the unfolded protein response (UPR). The UPR induces the transcriptional upregulation of multiple ER resident proteins involved in protein folding (for reviews, see references 20, 23, and 44). BiP/GRP78 is an abundant protein residing in the ER and essential for protein folding and protein sorting as a molecular chaperone. The structure of BiP is highly conserved from higher eukaryotes to yeast. In the yeast Saccharomyces cerevisiae, the BiP protein is encoded by KAR2. As in mammalian cells, the expression of KAR2 in yeast cells is induced by a variety of treatments, such as the addition of tunicamycin, which causes the accumulation of the unfolded protein in the ER. IRE1 encodes a bifunctional protein with transmembrane kinase and endoribonuclease activities that transmits the stress signal from the ER to the nucleus. The accumulation of the unfolded protein triggers Ire1p oligomerization, thereby inducing autophosphorylation, resulting in subsequent elicitation of the kinase and RNase activities. Activated Ire1p, together with the tRNA ligase encoded by RLG1 and Ada5p, causes unconventional splicing of HAC1 mRNA. HAC1 mRNA splicing allows efficient translation of Hac1p, which has a basic leucine zipper domain and functions as a transcriptional factor for genes regulated by the UPR, such as KAR2, PDI1, and FKB2. Since Hac1p is necessary for IRE1-mediated KAR2 induction as a positive transcription factor, mutants having a defect in ire1 or hac1 are unable to induce the transcription of KAR2, resulting in an inability of yeast cells to grow under stress conditions such as with the addition of tunicamycin. The IRE1 gene was first identified as the gene for inositol prototrophy (Ino+) of S. cerevisiae (29), and the HAC1 gene was isolated as a multicopy suppressor gene for the ire1 mutation (26). Mutants having a defect in ire1 or hac1 show inositol auxotrophy (Ino−) due to an inability to fully induce the expression of the INO1 gene, which encodes a rate-limiting enzyme for inositol synthesis (4, 24, 26). In S. cerevisiae, inositol is synthesized de novo in cells through the conversion of glucose 6-phosphate to inositol 1-phosphate, followed by dephosphorylation (5). The former reaction is mediated by inositol 1-phosphate synthase encoded by INO1 (6). Inositol is also taken up into cells in a carrier-mediated manner. S. cerevisiae possesses two distinct inositol transport systems. The major transport system is encoded by ITR1, and the minor one is encoded by ITR2 (30, 31). It is known that the expression of INO1 and ITR1, as well as a number of genes for enzymes involved in the synthesis of phospholipids in S. cerevisiae, is repressed in cells grown in the presence of inositol and derepressed in cells grown in the absence of inositol (32). INO1 and other coregulated genes of phospholipid biosynthesis contain one or two stretches of a conserved cis-acting promoter element, termed the inositol-choline-responsive element (ICRE). The INO2 and INO4 genes encode basic helix-loop-helix proteins that form a heterodimer and function as a transcriptional factor through binding to the ICRE (1, 41). Mutants having a defect in not only ino1 but also ino2 or ino4 exhibit the Ino− phenotype (10, 12). Several other mutants also show the Ino− phenotype. For example, mutations in the large subunit of RNA polymerase II (40) and the TATA binding protein (2, 43) lead to the Ino− phenotype due to an inability to express the INO1 gene. Depletion of the general transcription factor TFIIA also impairs INO1 activation (21). Cells having defects in the SWI1, SWI2, and SWI3 genes, which encode components of the SWI-SNF chromatin-remodeling complex, exhibit a derepression defect of INO1 (33–35). Furthermore, deletion of the INO80 gene, which is an SNF2-SWI2 paralogue and encodes a component of the INO80 chromatin-remodeling complex, prevents the efficient expression of INO1 (7, 42). On the other hand, mutations in the SIN3 and UME6 genes lead to high-level INO1 expression (15, 16). The SIN3 and UME6 gene products are components of a large complex that contains the RPD3 gene product, a histone deacetylase (17, 18, 39). Deletion of the RPD3 gene also leads to high-level INO1 expression. Additionally, a mutation in the OPI1 gene that encodes a protein containing leucine zipper and polyglutamine stretch motifs leads to an inositol overproduction phenotype (47). Little is known about the mechanism by which defects of the IRE1 or HAC1 gene lead to a decrease in INO1 expression or about the mechanism by which inositol regulates INO1 expression. In this study, we attempted to isolate and characterize the yeast gene that can suppress the Ino− phenotype of the Δhac1 strain when present in multiple copies. Here, we show that multiple copies of truncated ITC1 can suppress the Ino− phenotype of the Δire1 and Δhac1 strains and that the Isw2p-Itc1p complex usually represses INO1 expression.