Regulation of aflatoxin (AF) biosynthesis likely involves a complex interplay of positive- and negative-acting factors that are affected by physiological cues responsive to internal and external stimuli. These factors, presumably, modulate the expression of the AF pathway-specific regulatory gene, aflR, whose product, AFLR, a zinc cluster transcription factor, then turns on or off the transcription of other AF genes. To determine if the AFLR carboxyl region (AFLRC) interacts with positive- or negative-acting proteins, we fused the Aspergillus parasiticus aflR carboxyl coding region (aflRC) to the promoter of A. parasiticus nitrite reductase gene (niiA(p)::aflRC), and transformed it into A. parasiticus SRRC 2043. Transformants that contained two copies of niiA(p)::aflRC, one at the niaD locus and another at the aflR locus, overproduced AF precursors independent of the nitrogen source. The higher copy number of the integrated niiA(p)::aflRC correlated with increased production of AF precursors by the transformants as well as increased expression of both aflRC and native aflR in potato dextrose broth and A&M medium. Since aflRC does not encode a DNA-binding domain, the expressed AFLRC should not bind to the promoters of AF pathway genes and affect transcription directly. The results are consistent with AFLRC titrating out a putative repressor that interacts with AFLR under different growth conditions and modulates AF biosynthesis. This interaction also indirectly affects sclerotial development.