The transcriptional activation of enzymes involved in galactose utilization (GAL genes) in Saccharomyces cerevisiae is regulated by a complex interplay between three regulatory proteins encoded by GAL4 (transcriptional activator), GAL3 (signal transducer) and GAL80 (repressor). The relative concentrations of the signal transducer and the repressor are maintained by autoregulation. Cells disabled for autoregulation exhibit phenotypes distinctly different from that of the wild type cells, enabling us to explore the biological significance of autoregulation. The redundancy in signal transduction due to the presence of GAL1 (alternate signal transducer) also makes it a suitable model to understand the phenomenon of epigenetics. In this article we review some of the recent attempts made to understand the importance of epigenetics in the establishment of cellular and transcriptional memory.