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 fep1 Delta mutant strain, the fio1(+) gene is highly expressed and is unregulated by iron. Furthermore, the fep1 Delta 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 tup11 Delta and tup12 Delta 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.