Yeast mutants assigned to the pet complementation group G104 were found to lack alpha-ketoglutarate dehydrogenase activity as a result of mutations in the dihydrolipoyl transsuccinylase (KE2) component of the complex. The nuclear gene KGD2, coding for yeast KE2, was cloned by transformation of E250/U6, a G104 mutant, with a yeast genomic library. Analysis of the KGD2 sequence revealed an open reading frame encoding a protein with a molecular weight of 52,375 and 42% identities to the KE2 component of Escherichia coli alpha-ketoglutarate dehydrogenase complex. Disruption of the chromosomal copy of KGD2 in a respiratory-competent haploid yeast strain elicited a growth phenotype similar to that of G104 mutants and abolished the ability to mitochondria to catalyze the reduction of NAD+ by alpha-ketoglutarate. The expression of KGD2 was transcriptionally regulated by glucose. Northern (RNA) analysis of poly(A)+ RNA indicated the existence of two KGD2 transcripts differing in length by 150 nucleotides. The concentrations of both RNAs were at least 10 times lower in glucose (repressed)- than in galactose (derepressed)-grown cells. Different 5'-flanking regions of KGD2 were fused to the lacZ gene of E. coli in episomal plasmids, and the resultant constructs were tested for expression of beta-galactosidase in wild-type yeast cells and in hap2 and hap3 mutants. Results of the lacZ fusion assays indicated that transcription of KGD2 is activated by the HAP2 and HAP3 proteins. The regulated expression of KGD2 was found to depend on sequences that map to a region 244 to 484 nucleotides upstream of the structural gene. This region contains two short sequence elements that differ by one nucleotide from the consensus core (5'-TN[A/G]TTGGT-3') that has been proposed to be essential for binding of the HAP activation complex. These data together with earlier reports on the regulation of the KGD1 and LPD1 genes for the alpha-ketoglutarate and dihydrolipoyl dehydrogenases indicate that all three enzyme components of the complex are catabolite repressed and subject to positive regulation by the HAP2 and HAP3 proteins.