Metal-responsive transcription factor-1 (MTF-1) is a zinc finger protein conserved from mammals to insects. It mediates protection against heavy metal load by activating the expression of metallothionein and other genes. In Drosophila, MTF-1 serves a dual function in that it not only helps to protect against heavy metal load but also induces the expression of Ctr1B, the gene for an intestinal copper importer, upon copper starvation. By dissecting Drosophila MTF-1 function, we have identified determinants for nuclear import and export, and characterized a phosphorylation site mutant (T127A) that differentially affects MTF-1 target genes. Further, by generating a series of fusion proteins with the heterologous DNA binding domain of Gal4 we identified a strong, constitutive activation domain in the central region of MTF-1 (aa 352-540). By contrast, an extended fusion protein that includes MTF-1's C-terminus (aa 352-791) is not active in standard conditions but induced by copper load. The paramount regulatory importance of the C-terminal part, that harbors a cysteine-rich "metallothionein-like" domain, was corroborated by different experiments. Transgenic flies expressing C-terminally truncated MTF-1 variants displayed high constitutive transcription of both, the genes for metallothioneins and the copper importer Ctr1B. The indiscriminate activation of these genes that are normally induced under opposite conditions of copper load and copper starvation manifested itself in a shortened lifespan, crippled wings, and female sterility.