CCAAT/enhancer-binding protein (C/EBP) is expressed in certain cell types including hepatocytes and adipocytes. In order to understand the mechanisms that control the expression of the mouse C/EBP gene in the liver as well as in adipocytes, we have studied both the endogenous gene and transfected C/EBP gene constructs. The initiation site of transcription was identified and a strong liver-specific DNase-I hypersensitive site located at -3 kb, which does not appear to contribute functionally to the regulation of the gene in a variety of either transiently or stably transfected cells with constructs which include sequences up to 6-kb upstream of the transcription start. C/EBP gene expression during the transition from preadipocytes to adipocytes was shown to be controlled at the level of transcription. However, adipocytes stably transfected with constructs that include -3.3 kb upstream of the C/EBP gene do not express the reporter genes in a differentiation-specific manner. We detected several DNA-binding proteins that interact with the upstream sites of the C/EBP gene. Those include two labile and two heat-stable site-specific DNA-binding proteins that are present in nuclear extracts from several tissues and cultured cell lines.