Structural mechanism of ergosterol regulation by fungal sterol transcription factor Upc2

Transcriptional regulation of ergosterol biosynthesis in fungi is crucial for sterol homeostasis and for resistance to azole drugs. In Saccharomyces cerevisiae , the Upc2 transcription factor activates the expression of related genes in response to sterol depletion by poorly understood mechanisms. We have determined the structure of the C-terminal domain (CTD) of Upc2, which displays a novel α-helical fold with a deep hydrophobic pocket. We discovered that the conserved CTD is a ligand-binding domain and senses the ergosterol level in the cell. Ergosterol binding represses its transcription activity, while dissociation of the ligand leads to relocalization of Upc2 from cytosol to nucleus for transcriptional activation. The C-terminal activation loop is essential for ligand binding and for transcriptional regulation. Our findings highlight that Upc2 represents a novel class of fungal zinc cluster transcription factors, which can serve as a target for the developments of antifungal therapeutics. In yeast, the transcription factor Upc2 regulates genes involved in ergosterol biosynthesis, but how its activity is regulated is unknown. Here Yang et al . present the structure of the Upc2 C-terminal domain and discover that it functions as a sensor of the ergosterol level, regulating the transcriptional activity and cellular localization of Upc2.