The response of gene expression to intra- and extra-cellular cues is largely mediated through changes in the activity of transcription factors (TFs), whose sequence specificities are largely known. However, the rules by which promoters decode the amount of active TF into gene expression are not well understood. Here, we measure the activity of 6500 designed promoters at six different levels of TF activity in budding yeast. We observe that maximum promoter activity is determined by TF activity and not by the number of sites. Surprisingly, the addition of an activator-binding site often reduces expression. A thermodynamic model that incorporates competition between neighboring binding sites for a local pool of TF molecules explains this behavior and accurately predicts both absolute expression and the amount by which addition of a site increases or reduces expression. Taken together, our findings support a model in which neighboring binding sites interact competitively when TF is limiting but otherwise act additively.
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