The URS2 region of the Saccharomyces cerevisiae HO upstream region contains 10 binding sites for the Swi4p/Swi6p transcription factor and confers Swi4p dependence for transcription. Using a hybrid promoter, UASGAL (upstream activation sequence of GAL1)-URS2R, in which the GAL1-10 regulatory region is fused to the proximal 360 bp of URS2, we isolated mutants in which Swi4p is no longer required for transcription. Mutations of SIN4, ROX3, SRB8, SRB9, SRB10, SRB11, and two novel genes, NUT1 and NUT2, relieve the requirement of Swi4p for expression of this reporter. We found that NUT1 (open reading frame [ORF] YGL151w) is a nonessential gene, that NUT2 (ORF YPR168w) is essential, and that both Nut1p and Nut2p encode nuclear proteins. Deletion of NUT1 causes a constitutive, Swi4p-independent phenotype only in combination with the nut2-1 allele or an allele of CCR4. In contrast, inactivation of a temperature-sensitive allele of NUT2, nut2-ts70, alone causes constitutivity. nut1Delta nut2-1 cells and sin4Delta cells exhibit Swi4p-independent expression of an ho-lacZ reporter but not of an intact ho gene. Likewise, a pPHO5-lacZ construct is constitutively expressed in nut1 nut2 mutants relative to their wild-type counterparts. These results suggest that Nut1p, Nut2p, Sin4p, and Ccr4p define a group of proteins that negatively regulate transcription in a subtle manner which is revealed by artificial reporter genes.