We report here a novel mechanism for glucose-mediated activation of carbohydrate response element binding protein (ChREBP), a basic helix-loop-helix/leucine zipper (bHLH/ZIP) transcription factor of Mondo family that binds to carbohydrate response element in the promoter of some glucose-regulated genes and activates their expression upon glucose stimulation. Structure-function analysis of ChREBP in a highly glucose-sensitive system using GAL4-ChREBP fusion constructs revealed a glucose-sensing module (GSM) that mediates glucose responsiveness of ChREBP. GSM is conserved among Mondo family members; MondoA, a mammalian paralog of unknown function, and the GSM region of a Drosophila homolog were also found to be glucose responsive. GSM is composed of a low-glucose inhibitory domain (LID) and a glucose-response activation conserved element (GRACE). We have identified a new mechanism accounting for glucose responsiveness of ChREBP that involves specific inhibition of the transactivation activity of GRACE by LID under low glucose concentration and reversal of this inhibition by glucose in an orientation-sensitive manner. The intramolecular inhibition and its release by glucose is a regulatory mechanism that is independent of changes of subcellular localization or DNA binding activity, events that also appear to be involved in glucose responsiveness. This evolutionally conserved mechanism may play an essential role in glucose-responsive gene regulation.