The MATA locus of Yarrowia lipolytica, which was on the basis of its ability to induce sporulation in a diploid B/B strain, represses the mating capacity of this strain. The gene functions required for induction of sporulation and repression of conjugation could be separated by subcloning. Sequence analysis revealed two ORFs in the MATA locus. One of them (MATA1) codes for a protein of 119 amino acids which is required to induce sporulation. The other (MATA2) codes for a protein of 291 amino acids that is able to repress conjugation. Both genes are oriented divergently from a central promoter region, which possesses putative TATA and CAAT boxes for both genes. The product of MATA1 shows no homology to any known protein and seems to represent a new class of mating-type genes. MATA2 contains a HMG box with homology to other mating-type genes. Both MATA1 and MATA2 are mating-type specific. In cells of both mating types, the regions flanking the MATA locus contain sequences with homology to either S. cerevisiae SLA2 and ORF YBB9, respectively. From hybridization and subcloning data we estimate that the MATA region is approximately 2 kb long and is present only once in the genome.