We have characterized a Drosophila gene that is a highly conserved homolog of the mammalian cyclic AMP (cAMP)-responsive transcription factors CREB and CREM. Uniquely among Drosophila genes characterized to date, it codes for a cAMP-responsive transcriptional activator. An alternatively spliced product of the same gene is a specific antagonist of cAMP-inducible transcription. Analysis of the splicing pattern of the gene suggests that the gene may be the predecessor of the mammalian CREB and CREM genes.