Dal82p binds to the UIS_ALL sites of allophanate-induced genes of the allantoin-degradative pathway and functions synergistically with the GATA family Gln3p and Gat1p transcriptional activators that are responsible for nitrogen catabolite repression-sensitive gene expression. CAR2, which encodes the arginine-degradative enzyme ornithine transaminase, is not nitrogen catabolite repression sensitive, but its expression can be modestly induced by the allantoin pathway inducer. The dominant activators of CAR2 transcription have been thought to be the ArgR and Mcm1 factors, which mediate arginine-dependent induction. These observations prompted us to investigate the structure of the CAR2 promoter with the objectives of determining whether other transcription factors were required for CAR2 expression and, if so, of ascertaining their relative contributions to CAR2's expression and control. We show that Rap1p binds upstream of CAR2 and plays a central role in its induced expression irrespective of whether the inducer is arginine or the allantoin pathway inducer analogue oxalurate (OXLU). Our data also explain the early report that ornithine transaminase production is induced when cells are grown with urea. OXLU induction derives from the Dal82p binding site, which is immediately downstream of the Rap1p site, and Dal82p functions synergistically with Rap1p. This synergism is unlike all other known instances of Dal82p synergism, namely, that with the GATA family transcription activators Gln3p and Gat1p, which occurs only in the presence of an inducer. The observations reported suggest that CAR2 gene expression results from strong constitutive transcriptional activation mediated by Rap1p and Dal82p being balanced by the down regulation of an equally strong transcriptional repressor, Ume6p. This balance is then tipped in the direction of expression by the presence of the inducer. The formal structure of the CAR2 promoter and its operation closely follow the model proposed for CAR1.