We have developed LeTICE (Learning Transcriptional networks from the Integration of ChIP-chip and Expression data), an algorithm for learning a transcriptional network from ChIP-chip and expression data. The network is specified by a binary matrix of transcription factor (TF)-gene interactions partitioning genes into modules and a background of genes that are not involved in the transcriptional regulation. We define a likelihood of a network, and then search for the network optimizing the likelihood. We applied LeTICE to the location and expression data from yeast cells grown in rich media to learn the transcriptional network specific to the yeast cell cycle. It found 12 condition-specific TFs and 15 modules each of which is highly represented with functions related to particular phases of cell-cycle regulation.