In Schizosaccharomyces pombe, the iron sensor Fep1 mediates the transcriptional repression of iron transport genes in response to high concentrations of iron. On the other hand, fep1(+) expression is downregulated under conditions of iron starvation by the CCAAT-binding factor Php4. In this study, we created a fep1Delta php4Delta double mutant strain where expression of fep1(+) was disengaged from its iron limitation-dependent repression by Php4 to examine the effects of iron on constitutively expressed functional fep1(+)-GFP and TAP-fep1(+) alleles and their gene products. In these cells, Fep1-green fluorescent protein was invariably localized in the nucleus under both iron-limiting and iron-replete conditions. Using chromatin immunoprecipitation assays, we found that Fep1 is associated with iron-responsive promoters in vivo. Chromatin binding was iron dependent, with a loss of binding observed in the presence of low iron. Functional dissection of the protein revealed that the N-terminal 241-residue segment that includes two consensus Cys(2)/Cys(2)-type zinc finger motifs and a Cys-rich region is required for optimal promoter occupancy by Fep1. Within this segment, a minimal module encompassing amino acids 60 to 241 is sufficient for iron-dependent chromatin binding. Using yeast one-hybrid analysis, we showed that the replacement of the repression domain of Fep1 by fusing the activation domain of VP16 to the chromatin-binding fragment of amino acids 1 to 241 of Fep1 converts the protein from an iron-dependent repressor into an iron-dependent transcriptional activator. Thus, the repression function of Fep1 can be replaced with that of a transcriptional activation function without the loss of its iron-dependent DNA-binding activity.