Urm1 is a modifier protein that is conjugated to substrate proteins through thioester formation with the E1-like enzyme, Uba4. Here is shown that the lack of urmylation causes derepression of the GAP1 gene (encoding a nitrogen-regulated broad-spectrum amino acid-scavenging permease) in the presence of rich nitrogen sources, and simultaneous inhibition of the expression of CIT2, a TCA-cycle gene involved in the production of glutamate and glutamine. This effect is dependent on the TORC1- and nutrient-regulated transcriptional factors, Nil1p and Gln3p. Evidence is provided that, in the absence of urmylation, nuclear/cytosolic shuffling of both transcriptional factors is altered, ultimately leading to inability to repress GAP1 gene in the presence of a rich nitrogen source. Altogether, the data presented here indicate an important role of the urmylation pathway in regulating the expression of genes involved in sensing and controlling amino acids levels. (c) 2007 Federation of European Biochemical Societies. Published by Elsevier B.V. All rights reserved.