The Neurospora crassa eas (ccg-2) gene, which encodes a fungal hydrophobin, is transcriptionally regulated by the circadian clock. In addition, eas (ccg-2) is positively regulated by light and transcripts accumulate during asexual development. To sort out the basis of this complex regulation, deletion analyses of the eas (ccg-2) promoter were carried out to localize the cis-acting elements mediating clock, light, and developmental control. The primary sequence determinants of a positive activating clock element (ACE) were found to reside in a 45-bp region, just upstream from the TATA box. Using a novel unregulated promoter/reporter system developed for this study, we show that a 68-bp sequence encompassing the ACE is sufficient to confer clock regulation on the eas (ccg-2) gene. Electrophoretic mobility shift assays using the ACE reveal factors present in N. crassa protein extracts that recognize and bind specifically to DNA containing this element. Separate regions of the eas (ccg-2) promoter involved in light induction and developmental control are identified and shown not to be required for clock-regulated expression of eas (ccg-2). The distinct nature of the ACE validates its use as a tool for the identification of upstream regulatory factors involved in clock control of gene expression.