We have identified the product of the NIL2 gene of Saccharomyces cerevisiae which contains a zinc finger region highly homologous to those of the GATA factors Gln3p and Nil1p as an antagonist of Nil1p and to a lesser extent of Gln3p. The expression of many nitrogen-regulated genes of Saccharomyces cerevisiae requires activation by GATA factor Gln3p or Nil1p and is prevented by the presence of glutamine in the growth medium. Disruption of NIL2 results in a great increase in the expression of NIL1 and of GAP1, the structural gene for the general amino acid permease, in glutamine-grown cells in response to activation by Nil1p. The primary effect of the elimination of Nil2p appears to be an increase in the intracellular level of Nil1p, which in turn is responsible for increased expression of GAP1. Experiments using an artificial UAS (upstream activating site) consisting of three GATAAGATAAG sites revealed that Nil2p exerts its effect by competing primarily with Nil1p and less effectively with Gln3p for these sites. Apparently, the principal role of Nil2p is to prevent activation of transcription by Nil1p unless Nil1p has been converted to a more active state by the absence of glutamine and glutamate.