Numerous genes are transcriptionally activated and repressed in a cell cycle-dependent manner. We have recently reported the global gene expression program during the cell cycle in fission yeast (S. pombe). Among the periodically expressed fission yeast genes, a large proportion shows peak transcript levels during mitosis. Many of these genes are regulated by a transcriptional cascade involving two transcription factors: the forkhead protein Sep1p which activates the zinc finger protein Ace2p. A main function of the Sep1p-Ace2p transcriptional pathway is to trigger the separation of daughter cells after cytokinesis. Absence of Sep1p, Ace2p, or some of their target genes leads to a hyphal-like growth pattern with chains of connected cells. Yeast cells probably evolved from filamentous fungi. It is possible that the Sep1p-Ace2p pathway contributed to the emergence of proliferation through single cells, and that this regulatory pathway can still be modulated to adjust growth modes depending on environmental conditions. Here, various properties of the Sep1p-Ace2p transcriptional pathway and mechanisms for cell separation are discussed in the context of recent findings.