Abstract Many transcription factors contribute to cellular homeostasis by integrating multiple signals. Signaling via the yeast Gal80 protein, a negative regulator of the prototypic transcription activator Gal4, is primarily regulated by galactose. ScGal80 from Saccharomyces cerevisiae has been reported to bind NAD(P). Here, we show that the ability to bind these ligands is conserved in KlGal80, a Gal80 homolog from the distantly related yeast Kluyveromyces lactis. However, the homologs apparently have diverged with respect to response to the dinucleotide. Strikingly, ScGal80 binds NAD(P) and NAD(P)H with more than 50-fold higher affinity than KlGal80. In contrast to ScGal80, where NAD is neutral, NAD and NADP have a negative effect in KlGal80 on its interaction with a KlGal4-peptide in vitro. Swapping a loop in the NAD(P) binding Rossmann-fold of ScGal80 into KlGal80 increases the affinity for NAD(P) and has a significant impact on KlGal4 regulation in vivo. Apparently, dinucleotide binding allows coupling of the metabolic state of the cell to regulation of the GAL/LAC genes. The particular sequences involved in binding determine how exactly the metabolic state is sensed and integrated by Gal80 to regulate Gal4.