The yeast "two-component" osmotic stress phosphorelay consists of the histidine kinase, Sln1p, the phosphorelay intermediate, Ypd1p and two response regulators, Ssk1p and Skn7p, whose activities are regulated by phosphorylation of a conserved aspartyl residue in the receiver domain. Dephospho-Ssk1p leads to activation of the hyper-osmotic response (HOG) pathway, whereas phospho-Skn7p presumably leads to activation of hypo-osmotic response genes. The multifunctional Skn7 protein is important in oxidative as well as osmotic stress; however, the Skn7p receiver domain aspartate that is the phosphoacceptor in the SLN1 pathway is dispensable for oxidative stress. Like many well-characterized bacterial response regulators, Skn7p is a transcription factor. In this report we investigate the role of Skn7p in osmotic response gene activation. Our studies reveal that the Skn7p HSF-like DNA binding domain interacts with a cis-acting element identified upstream of OCH1 that is distinct from the previously defined HSE-like Skn7p binding site. Our data support a model in which Skn7p receiver domain phosphorylation affects transcriptional activation rather than DNA binding to this class of DNA binding site.