Genetic experiments have indicated a role for the Ccr4-Not complex in the response to hydroxyurea (HU) induced replication stress and ionizing radiation in yeast. This response includes transcriptional induction of the four genes constituting the ribonucleotide reductase (RNR) enzymatic complex, RNR1-4 and degradation of its inhibitor, Sml1p. The Ccr4-Not complex has originally been described as a negative regulator of RNA polymerase II (pol II) transcription, but it has also been implicated in mRNA turnover and protein ubiquitination. We investigated the mechanism of the HU sensitivity conferred by mutation of CCR4-NOT genes. We found that the ubiquitin protein ligase activity of Not4p does not play a role in HU induced Sml1p degradation. We show, however, that the HU sensitivity of ccr4-not mutant strains correlated very well with a defect in accumulation of RNR2, RNR3 and RNR4 mRNA after HU or methyl-methane sulfonate (MMS) treatment. Chromatin immunoprecipitation (ChIP) experiments show that TBP, pol II and Set1p recruitment to the activated RNR3 locus is defective in cells lacking NOT4. Moreover, RNR3-promoter activity is not induced by HU in these cells. Our experiments show that induction of RNR gene transcription is defective in ccr4-not mutant strains, providing an explanation for their sensitivity to HU.