The Msc2 and Zrg17 proteins of Saccharomyces cerevisiae are members of the cation diffusion facilitator family of zinc transporters. These proteins form heteromeric complexes that transport zinc into the ER (endoplasmic reticulum). Previous studies suggested that the ZRG17 gene is regulated in response to zinc status by the Zap1 transcription factor. Zap1 activates the expression of many genes in zinc-deficient cells. In the present study, we assessed whether ZRG17 is a direct Zap1 target gene. We showed that ZRG17 mRNA levels were elevated in zinc-limited cells in a Zap1-dependent manner and were also elevated in zinc-replete cells expressing a constitutively active allele of Zap1. Furthermore, Zrg17 protein levels correlated closely with mRNA levels. A candidate Zap1-binding site [ZRE (zinc-responsive element)] in the ZRG17 promoter was required for this induction. Using electrophoretic mobility-shift assays and chromatin immunoprecipitation, we demonstrated that Zap1 binds specifically to the ZRG17 ZRE both in vitro and in vivo. By using a chromosomal ZRG17 mutant with a non-functional ZRE, we found that Zap1 induction of ZRG17 is required for ER function as indicated by elevated ER stress under zinc-limited conditions. Together, these results establish that ZRG17 is a direct Zap1 target gene and its regulation has biological importance in maintaining ER function.