The GAL genes, which encode the enzymes required for normal galactose metabolism in yeast, are transcriptionally regulated by three proteins Gal4p, an activator; Gal80p, an inhibitor; and Gal3p, a galactose sensor. These proteins control the switch between inert and active gene expression. The transcriptional activation function of Gal4p is rendered inactive in the presence of Gal80p. Here we present the three-dimensional structure of a complex between the acidic activation domain of Gal4p and Gal80p. The transactivation domain initiates with an extended region of polypeptide chain followed by two turns of an amphipathic alpha-helix. It fits into and across a deep cleft within the Gal80p dimer with the protein-protein interface defined primarily by hydrophobic interactions. A disordered loop in the apo-Gal80p structure (Asp-309 to Ser-316) becomes well-defined upon binding of the transactivation domain. This investigation provides a new molecular scaffold for understanding previous biochemical and genetic studies.