The Saccharomyces cerevisiae SIP3 gene was identified in a two-hybrid screen for proteins that interact in vivo with the SNF1 protein kinase, which is necessary for release of glucose repression. We showed that the C-terminal part of SIP3, recovered through its ability to interact with SNF1, strongly activates transcription when tethered to DNA. We have cloned and sequenced the entire SIP3 gene. The predicted 142-kD SIP3 protein contains a putative leucine zipper motif located in its C terminus. The native SIP3 protein also interacts with DNA-bound SNF1 and activates transcription of a target gene. A complete deletion of the SIP3 gene did not confer phenotypes characteristic of snf1 mutants. However, in a mutant deficient for the SNF1 kinase activity due to loss of the SNF4 stimulatory function, increased dosage of SIP3 partially restored expression of the glucose-repressible SUC2 gene. Overexpression of the C terminus of SIP3 caused defects in growth and SUC2 expression which were remedied by overexpressing SNF1. Taken together, these genetic data suggest that SIP3 is functionally related to the SNF1 protein kinase pathway.