In Saccharomyces cerevisiae, two positive transcription factors of the GATA family, Gln3p and Nil1p/Gat1p, upregulate the expression of multiple nitrogen pathway genes via upstream 5'-GATA-3' sequences. Another GATA factor, Uga43p/Dal80p, downregulates to varying degrees the expression of some nitrogen-regulated genes. Here, we report the functional analysis of a fourth GATA factor, Gzf3p/Nil2p, whose gene was discovered by systematic sequencing of chromosome X. The Gzf3 protein most closely resembles Uga43p. Similar to Uga43p, Gzf3p has the properties of a negative GATA factor. While Uga43p is active specifically under nitrogen-depression conditions, Gzf3p exerts its negative regulatory function specifically on preferred nitrogen sources: It is involved in nitrogen repression of Nil1p-dependent transcription. At least one positive GATA factor is required for the UGA43 and GZF3 genes to be expressed. The Uga43p factor negatively regulates GZF3 expression and vice versa. In addition, both Uga43p and Gzf3p moderately regulate expression of their own genes. These two proteins seem to be parts of a complex network of GATA factors which probably play a determining role in nitrogen-regulated transcription.