Bas1p and Bas2p (Pho2p) are Myb-related and homeodomain DNA binding proteins, respectively, required for transcription of adenine biosynthetic genes in Saccharomyces cerevisiae. The repression of ADE genes in adenine-replete cells involves down-regulation of the functions of one or both of these activator proteins. A LexA-Bas2p fusion protein was found to activate transcription from a lexAop-lacZ reporter independently of both BAS1 function and the adenine levels in the medium. In contrast, a LexA-Bas1p fusion activated the lexAop reporter in a BAS2-dependent and adenine-regulated fashion. The DNA binding activity of Bas2p was not needed for its ability to support activation of the lexAop reporter by LexA-Bas1p, indicating that LexA-Bas1p recruits Bas2p to this promoter. The activation functions of both authentic Bas1p and LexA-Bas1p were stimulated under adenine-repressing conditions by overexpression of Bas2p, suggesting that complex formation by these proteins is inhibited in adenine-replete cells. Replacement of Asp-617 with Asn in Bas1p or LexA-Bas1p allowed either protein to activate transcription under repressing conditions in a manner fully dependent on Bas2p, suggesting that this mutation reduces the negative effect of adenine on complex formation by Bas1p and Bas2p. Deletions of N-terminal and C-terminal segments from the Bas1p moiety of LexA-Bas1p allowed high-level activation by the truncated proteins independently of Bas2p and adenine levels in the medium. From these results we propose that complex formation between Bas1p and Bas2p unmasks a latent activation function in Bas1p as a critical adenine-regulated step in transcription of the ADE genes.