Fungi of the genus are a rich source of enzymes, such as cellulases and hemicellulases, that can degrade lignocellulosic biomass and are therefore of interest for biotechnological approaches seeking to optimize biofuel production. The essential transcription factor ACE3 is involved in cellulase production in ; however, the mechanism by which ACE3 regulates cellulase activities is unknown. Here, we discovered that the nominal sequence in the genome available through the Joint Genome Institute is erroneously annotated. Moreover, we identified the complete sequence, the ACE3 Zn(II)Cys domain, and the ACE3 DNA-binding sites containing a 5'-CGGAN(T/A)-3' consensus. We found that in addition to its essential role in cellulase production, is required for lactose assimilation and metabolism in Transcriptional profiling with RNA-Seq revealed that deletion down-regulates not only the bulk of the major cellulase, hemicellulase, and related transcription factor genes, but also reduces the expression of lactose metabolism-related genes. Additionally, we demonstrate that ACE3 binds the promoters of many cellulase genes, the cellulose response transporter gene , and transcription factor-encoding genes, including We also observed that XYR1 dimerizes to facilitate cellulase production and that ACE3 interacts with XYR1. Together, these findings uncover how two essential transcriptional activators mediate cellulase gene expression in On the basis of these observations, we propose a model of how the interactions between ACE3, Crt1, and XYR1 control cellulase expression and lactose metabolism in .