The GAL1 and GAL10 genes in *Saccharomyces cerevisiae* are divergently transcribed with 606 base pairs separating their transcription initiation sites. These genes are tightly coregulated, with expression induced approximately 1,000-fold in cells growing on galactose and repressed by growth on glucose. The study presents the nucleotide sequence of the region between these genes and the precise transcription initiation sites. A notable feature of this region is a 108-base-pair G+C-rich stretch located approximately in the middle. Mutations altering this region, both in vitro and in vivo, suggest that these G+C-rich sequences are essential for the expression of both genes. The region between GAL1 and GAL10 is sufficient for regulating gene expression, as fusing it to the HIS3 gene under GAL control demonstrates. The results indicate that the G+C-rich region may contain one or two sites involved in GAL1 and GAL10 expression, and that these promoter elements functionally overlap. The GAL-HIS3 fusions are useful for studying GAL gene regulation and for selecting regulatory mutants.The GAL1 and GAL10 genes in *Saccharomyces cerevisiae* are divergently transcribed with 606 base pairs separating their transcription initiation sites. These genes are tightly coregulated, with expression induced approximately 1,000-fold in cells growing on galactose and repressed by growth on glucose. The study presents the nucleotide sequence of the region between these genes and the precise transcription initiation sites. A notable feature of this region is a 108-base-pair G+C-rich stretch located approximately in the middle. Mutations altering this region, both in vitro and in vivo, suggest that these G+C-rich sequences are essential for the expression of both genes. The region between GAL1 and GAL10 is sufficient for regulating gene expression, as fusing it to the HIS3 gene under GAL control demonstrates. The results indicate that the G+C-rich region may contain one or two sites involved in GAL1 and GAL10 expression, and that these promoter elements functionally overlap. The GAL-HIS3 fusions are useful for studying GAL gene regulation and for selecting regulatory mutants.