Fission yeast cells arrest at G1 phase when starved of nitrogen. The molecular mechanism that ensures this arrest is poorly understood. We took a genetic approach to this problem. The fission yeast gad7-1 mutant failed to arrest at G1 when starved of nitrogen, and was poor in mating and sporulation. The gad7 gene was cloned by complementation. The deduced gad7 gene product was a bZIP protein of 566 amino acids, which could bind to the CRE (cAMP response element) sequence in vitro. Disruption of gad7 resulted in the same phenotypes as gad7-1. Expression of ste11, which encodes a key transcription factor for sexual development, was not inducible in the disruptant. Gad7 was co-immunoprecipitated with another bZIP protein Pcr1, suggesting that the two proteins form a heterodimer in vivo. Gad7 was phosphorylated, and the state of its phosphorylation appeared to be modified in pka1delta or wis1delta cells. Gad7, a CRE-binding protein that cooperates with Pcr1, is required for proper G1 arrest and gene expression under nitrogen starvation. Gad7 is a phosphoprotein, whose activity may be regulated by protein kinases including the cAMP-dependent protein kinase (Pka1) and Wis1 osmosensory MAP kinase kinase.