The epidermal growth factor receptor is vital for normal development and plays a role in oncogenesis. The level of activation of this receptor by transforming growth factor-alpha (TGF-alpha) is controlled, in part, by the rate of transcription of the TGF-alpha gene. In the characterization of the proximal TGF-alpha promoter by DNase I footprinting, a 43-base pair element (-88 to -130 relative to the transcription start site), designated TalphaRE I, was found that was specifically protected by nuclear proteins from human mammary carcinoma MDA468 cells. TalphaRE I was essential for the maximal expression of the TGF-alpha gene as indicated by deletion and mutagenesis analyses. TalphaRE I consists of two cis-acting elements, a proximal regulatory element (PRE, -89 to -103) and a distal regulatory element (DRE, -121 to -128). Both elements were able to form specific complexes with protein from MDA468 cell nuclear extracts and are necessary for the full activity of the entire 1.1-kilobase pair TGF-alpha promoter. Competition and antibody studies determined that the DRE contains a binding site for the transcription factor AP-2, while the protein that binds to the PRE has yet to be identified. When linked upstream to the heterologous herpes simplex thymidine kinase promoter, the TalphaRE I enhanced transcription up to 11-fold in MDA468 cells. Cotransfection of an AP-2 expression vector was able to activate transcription from the TalphaREI-TK construct in a DRE-dependent manner. These results further our understanding of how TGF-alpha transcription is regulated.