Cyc8(Ssn6)-Tup1, a general co-repressor complex, is recruited to promoter DNA via interactions with DNA-binding regulatory proteins and inhibits the transcription of many different yeast genes. Previous studies have established that repression function of the complex is performed by one subunit of the complex, the Tup1 protein, and requires specific components of the RNA polymerase II holoenzyme such as Sin4 and Rgr1. In this study we test the transcriptional activity of the Cyc8 subunit using a lexA operator-containing reporter. We show that a LexA-Cyc8 hybrid stimulates transcription when expressed in a tup1Delta, a sin4Delta, or a rgr1Delta strain, suggesting that transcriptional activation is an intrinsic property of the Cyc8-Tup1 co-repressor. In support of this notion we demonstrate that Cyc8-Tup1 has a dual function on CIT2, a gene encoding a citrate synthase that is expressed upon mitochondrial dysfunction. First, we show that Cyc8-Tup1 is tethered to CIT2 promoter by interacting with the activation domain of Rtg3, a bHLH/L-Zip DNA-binding transactivator of CIT2. Next we demonstrate that Cyc8-Tup1 activates CIT2 transcription in response to mitochondrial dysfunction, and this stimulatory effect is mediated by Cyc8. In contrast, basal (noninduced) expression of this gene is inhibited by Tup1. These findings establish a positive role for the Cyc8-Tup1 complex in transcription and support a model by which specific metabolic signals may convert the Cyc8-Tup1 transcriptional co-repressor to a co-activator of certain promoters.