KlADH3 is a Kluyveromyces lactis alcohol dehydrogenase gene induced in the presence of all respiratory carbon sources except ethanol, which specifically represses this gene. Deletion analysis of the KlADH3 promoter revealed the presence of both positive and negative elements. However, by site-directed mutagenesis and gel retardation experiments, we identified a 15-bp element responsible for the transcriptional repression of this gene by ethanol. In particular, this element showed putative sites required for the sequential binding of ethanol-induced factors responsible for the repressed conditions, and the binding of additional factors relieved repression. In addition, we showed that the ethanol element was required for in vivo repression of KlAdh3 activity.