In Chlamydomonas reinhardtii, the expression of the Nia1 gene encoding NAD(P)H nitrate reductase is controlled at the transcriptional level, positively by light and nitrate and negatively by ammonium. The sequences lying between positions -247 and -25 with respect to the start site of transcription were analyzed for the presence of regulatory elements using an arylsulfatase reporter gene ( Ars) fused to a minimal beta-tubulin promoter. An 84-bp sequence resulting from the joining of two partially homologous regions (-231 to -201 and -77 to -25) was shown to be necessary and sufficient to ensure activation and repression of the reporter gene. Interestingly, this shortened construct overexpressed the Ars gene in cells grown in nitrate-containing medium, relative to the construct bearing the complete -247 to -25 sequence. The 223-bp sequence was subjected to linker-scan analyses in the two regions of interest (-231 to -201 and -77 to -25). Most mutations introduced into this 84-bp sequence were shown to affect transcriptional activation on nitrate. Many of them also resulted in significantly increased arylsulfatase levels in cultures grown on ammonium. We therefore propose that the two regions act as bifunctional elements, stimulating or inhibiting the activity of the Nia1 promoter depending on the nature of the nitrogen source.