Schizosaccharomyces pombe cells acquire iron under high affinity conditions through the action of a cell surface ferric reductase encoded by the frp1(+) gene and a two-component iron-transporting complex encoded by the fip1(+) and fio1(+) genes. When cells are grown in the presence of iron, transcription of all three genes is blocked. A conserved regulatory element, 5'-(A/T)GATAA-3', located upstream of the frp1(+), fip1(+), and fio1(+) genes, is necessary for iron repression. We have cloned a novel gene, termed fep1(+), which encodes an iron-sensing transcription factor. Binding studies reveal that the putative DNA binding domain of Fep1 expressed as a fusion protein in Escherichia coli specifically interacts with the 5'-(A/T)GATAA-3' sequence in an iron-dependent manner. In a fep1Delta mutant strain, the fio1(+) gene is highly expressed and is unregulated by iron. Furthermore, the fep1Delta mutation increases activity of the cell surface iron reductase and renders cells hypersensitive to the iron-dependent free radical generator phleomycin. Mutations in the transcriptional co-repressors tup11(+) and tup12(+) are phenocopies to fep1(+). Indeed, strains with both tup11Delta and tup12Delta deletions fail to sense iron. This suggests that in the presence of iron and Fep1, the Tup11 and Tup12 proteins may act as co-repressors for down-regulation of genes encoding components of the reductive iron transport machinery.