Transcriptional activation of metallothionein (MT) genes by heavy metals is a valuable system for understanding the functions of MT as well as the cellular response against heavy metals. Although it is now known that heavy metal signals culminating in MT induction converge upon a transcription factor MTF-1, the mechanism underlying the MTF-1 response to heavy metals has not been elucidated. To address this issue, we investigated various aspects of the in vivo response of MTF-1 against heavy metals. Chromatin immunoprecipitation assay showed that heavy metal-dependent DNA binding of MTF-1 is the critical step in vivo. MTF-1 is primarily localized in the nucleus so that heavy metal-dependent nuclear translocation demonstrated by other groups does not seem to be universal and hence may not be critical for activation of MTF-1. In the six Zn finger motifs, the hallmark of MTF-1, the third and the fourth fingers are essential for the nuclear localization of MTF-1. Furthermore, all fingers except the last are important for transcriptional activation function of MTF-1, suggesting their key role for MTF-1 function. Also, a cysteine cluster structure located in the C-terminal region of MTF-1 is critical for transactivating function of MTF-1. These results suggest a central role of the Zn-finger domain and intramolecular cooperation through a structural change of MTF-1 for its response to heavy metal challenge.