We have identified Xbp1 (XhoI site-binding protein 1) as a new DNA-binding protein with homology to the DNA-binding domain of the Saccharomyces cerevisiae cell cycle regulating transcription factors Swi4 and Mbp1. The DNA recognition sequence was determined by random oligonucleotide selection and confirmed by gel retardation and footprint analyses. The consensus binding site of Xbp1, GcCTCGA(G/A)G(C/A)g(a/g), is a palindromic sequence, with an XhoI restriction enzyme recognition site at its center. This Xbpl binding site is similar to Swi4/Swi6 and Mbp1/Swi6 binding sites but shows a clear difference from these elements in one of the central core bases. There are binding sites for Xbp1 in the G1 cyclin promoter (CLN1), but they are distinct from the Swi4/Swi6 binding sites in CLN1, and Xbp1 will not bind to Swi4/Swi6 or Mbp1/Swi6 binding sites. The XBP1 promoter contains several stress-regulated elements, and its expression is induced by heat shock, high osmolarity, oxidative stress, DNA damage, and glucose starvation. When fused to the LexA DNA-binding domain, Xbp1 acts as transcriptional repressor, defining it as the first repressor in the Swi4/Mbp1 family and the first potential negative regulator of transcription induced by stress. Overexpression of XBP1 results in a slow-growth phenotype, lengthening of G1, an increase in cell volume, and a repression of G1 cyclin expression. These observations suggest that Xbp1 may contribute to the repression of specific transcripts and cause a transient cell cycle delay under stress conditions.