Transcription from the rat transforming growth factor alpha (TGF-alpha) promoter initiates at multiple sites within a 200-bp G+C-rich region that lacks TATA and CAAT motifs but contains multiple potential binding sites for the transcription factor Sp1. In the present study, we used deletion analysis to establish the 5' boundary of sequences required for efficient transcription from the predominant -58 start site. We then examined the functional activity of several putative Sp1 binding sites that occur within the transcriptionally important region downstream from -155. In the presence of either crude HeLa cell extract or purified Sp1 protein, two double-stranded oligonucleotides from this region, each of which contains three Sp1 elements, both displayed gel mobility shifts that were specifically inhibited in the presence of excess bona fide Sp1-binding sequence from the hamster dihydrofolate reductase (DHFR) gene. Methylation interference analysis of the major gel-shift complex produced with one of these oligonucleotides revealed a series of critical guanine residues located in, or adjacent to, one of the putative Sp1 recognition elements. The functional importance of Sp1 binding was confirmed by the findings that transcription in vitro from the -58 start site was inhibited in the presence of excess consensus Sp1-binding sequence and that coexpression of Sp1 dramatically induced TGF-alpha promoter-directed chloramphenicol acetyl transferase (CAT) expression in transfected Drosophila Schneider cells that otherwise lack functional Sp1. Additionally, the introduction of mutations into any of several putative Sp1 elements inhibited transcription in vitro from the -58 site, with the most proximal element tested having the largest effect. Sequential mutation of more distal elements produced a synergistic inhibition of transcription, suggesting that cooperative interactions between Sp1 sites are necessary for full expression from the TGF-alpha promoter.