Expression of the laccase gene (lace) of Neurospora crassa is transcriptionally inducible by the protein synthesis inhibitor cycloheximide. A lni-1 mutation, conferring the laccase non-inducible phenotype, was found to be a cpc-1 allele. Northern blots probed with plasmid pLA1, which carries the lacc gene revealed that the cpc-1 mutation abolishes the induced transcription of the lace gene, indicating requirement of the cpc-1 gene for transcriptional activation of the lace gene. In Northern blots probed with plasmid pAB1, which bears arg-2 a gene whose transcription is under the control of CPC1, the level of the arg-a transcript was shown to increase several-fold in wild-type mycelia but remained low in cpc-1 mycelia, after treatment with cycloheximide. This suggests that inhibition of protein synthesis with cycloheximide, as well as amino acid limitation, elicits the CPC1-mediated cross-pathway control. Characterization of the lace upstream region using a series of 5'-deletion plasmids led to the identification of a 170 bp DNA region required for the induced lace expression. Sequence analysis of this DNA region demonstrated that it includes a 9 bp sequence with dyad symmetry, ATGAATCAT, which differs only by a central base pair from ATGA(C/G)TCAT, the recognition sequence characteristic of CPC1 and GCN4 binding sites. Possible mechanisms by which CPC1 mediates transcriptional activation of the lace gene are discussed.