The yeast phosphatidylethanolamine methylation pathway is encoded by two structural genes, PEM1 and PEM2. The abundance of their transcripts was coordinately repressed by myo-inositol and choline. The most upstream transcriptional start sites for PEM1 and PEM2 were mapped at positions -142 and -42 relative to their first ATG codons, respectively. Promoter deletion analysis defined the 5' boundary of the regulatory region of PEM1 between -336 and -332 and that of PEM2 between -177 and -158. The 38-bp sequence between -336 and -299 from PEM1 and the 48-bp sequence between -177 and -130 from PEM2 conferred regulated transcription upon an upstream-activation-sequence-deficient test gene, CYC1-lacZ. Comparison of these two regions revealed the presence of a common octameric sequence, 5-CATRTGAA-3', which occurred twice in the 38-bp PEM1 regulatory region and once, followed by the 5'-AAACCCACACATG-3' GRFI site, in the 48-bp PEM2 regulatory region. When synthesized chemically and placed in front of CYC1-lacZ, a single copy of CATATGAA directed a rather low level of gene expression, but multiple copies produced high-level expression. In both cases, gene expression was sensitive to myo-inositol and choline. The synthesized GRFI site directed considerable but constitute lacZ expression. When used in conjunction with CATATGAA, synergistic, regulated gene expression was obtained. Hence CATRTGAA was concluded to play an important role in the myo-inositol-choline regulation of PEM1 and PEM2. Binding proteins to these sequences were demonstrated by electrophoretic mobility shift assay. Protein binding to CATRTGAA was not competitive with binding to the GRFI sequence, and vice versa. CATRTGAA was also found in the upstream regions of other genes encoding phospholipid-synthesizing enzymes, such as choline kinase, phosphatidylserine synthase, and myo-inositol-1-phosphate synthase, known to be repressed by myo-inositol and choline.