Cells respond to an accumulation of unfolded proteins in the endoplasmic reticulum (ER) by increasing transcription of genes encoding molecular chaperones and folding enzymes. The information is transmitted from the ER lumen to the nucleus by intracellular signaling pathway, called the unfolded protein response (UPR). In Saccharomyces cerevisiae, such induction is mediated by the cis-acting unfolded response element (UPRE) which has been thought to be recognized by Hac1p transcription factor. We cloned the ATFC gene showing similarity with Hac1p, and then examined to determine whether ATFC gene product specifically binds to UPRE by electrophoretic mobility shift assays. ATFC gene product displayed appreciable binding ${to ^{32}}P-labelled$ UPRE. Therefore, we concluded that ATFC represents a major component of the putative transcription factor responsible for the UPR leading to the induction of ER-localized stress proteins.