Bleomycin hydrolase is a cysteine peptidase discovered through its ability to detoxify the anti-cancer glycopeptide, bleomycin. Although found in all tissues in mammals and in both eukaryotes and prokaryotes, the normal cellular function of this peptidase is not known. We had previously reported the purification of bleomycin hydrolase from yeast based on its unexpected ability to bind DNA. Recently we collaborated in solving the crystal structure of this protein, revealing a hexameric ring organization. We now report that the molecular characterization of the gene encoding yeast bleomycin hydrolase is also surprising. The transcription of the gene is regulated by galactose. Furthermore, this regulation is conveyed by a binding site for the Gal4 regulatory protein in its promoter, prompting the designation of this gene as GAL6. Gal6p also appears to have a negative effect on the GAL system as a deletion of the gene leads to a 2-5-fold higher expression of the GAL1, GAL2, GAL7, and MEL1 genes. The GAL6 deletion does not affect the expression of another inducible gene, HSP26. Neither the peptidase nor the nucleic acid binding activity of Gal6p as assayed is apparently required to convey this regulation, implying yet another function for this new member of the GAL regulon.