Hidden transcription in eukaryotes carries a large potential of regulatory functions that are only recently beginning to emerge. Cryptic unstable transcripts (CUTs) are generated by RNA polymerase II (Pol II) and rapidly degraded after transcription in wild-type yeast cells. Whether CUTs or the act of transcription without RNA production have a function is presently unclear. We describe here a nonconventional mechanism of transcriptional regulation that relies on the selection of alternative transcription start sites to generate CUTs or mRNAs. Transcription from TATA box proximal start sites generates unstable transcripts and downregulates expression of the URA2 gene under repressing conditions. Uracil deprivation activates selection of distal start sites, leading to the production of stable mRNAs. We describe the elements that govern degradation of the CUT and activation of mRNA production by downstream transcription initiation. Importantly, we show that a similar mechanism applies to other genes in the nucleotides biogenesis pathway.