Fungi of the genus Trichoderma 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 Trichoderma reesei; however, the mechanism by which ACE3 regulates cellulase activities is unknown. Here, we discovered that the nominal ace3 sequence in the T. reesei genome available through the Joint Genome Institute is erroneously annotated. Moreover, we identified the complete ace3 sequence, the ACE3 Zn(II)2Cys6 domain, and the ACE3 DNA-binding sites containing a 5′-CGGAN(T/A)3-3′ consensus. We found that in addition to its essential role in cellulase production, ace3 is required for lactose assimilation and metabolism in T. reesei Transcriptional profiling with RNA-Seq revealed that ace3 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 crt1, and transcription factor-encoding genes, including xyr1 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 T. reesei 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 T. reesei.