Overexpression of cathepsin D (CD), a ubiquitous lysosomal protease, is closely associated with a poor clinical outcome for patients with breast cancer. Estrogen greatly induces transcription of the CD gene in estrogen receptor (ER)-positive breast cancer cells. In this report, we transiently introduced a human CD promoter/chloramphenicol acetyltransferase reporter gene into human MCF-7 breast cancer cells to study the mechanisms by which the ER activates the promoter. Using an in vivo Exonuclease III footprinting assay, we found that estrogen stimulation of MCF-7 cells induced loading of a transcription factor(s) to a portion of the promoter (-124 to -104) that is homologous to the adenovirus major late promoter element. Subsequent gel mobility shift assays with a 21-bp CD -124/-104 probe and nuclear extracts prepared from naive and estrogen-stimulated cells detected a single sequence-specific protein-DNA complex. Southwestern and UV cross-linking experiments detected two proteins of 44 kDa and 43 kDa that were specifically bound to the 21-bp fragment of the promoter. Gel super-shift assays with upstream stimulatory factor 1 (USF-1) and USF-2 antibodies demonstrated that USF-1 and USF-2 bound to the E box probe. Sequence specific binding was abolished by a 2-bp change shown previously to prevent the binding of USF to the E box. Incorporation of a mutant E box into the wild-type CD promoter/chloramphenicol acetyltransferase gene abolished USF binding and reduced the levels of both basal and estrogen-stimulated transcription. These results suggest that the ER targeting of USF-1 and USF-2 is a critical step in hormone activation of CD gene transcription in human breast cancer cells.