Expression of basic fibroblast growth factor cDNA or dominantly acting oncogenes, e.g., E1A, in immortalized mouse melanocytes leads to autonomous growth in vitro, depigmentation, and in the case of the oncogenes, tumorigenesis. Because downregulation of pigmentation is a common event in human metastatic melanoma cells grown in culture, we determined the molecular basis of depigmentation in a mouse melanocyte model system. We tested the effect of E1A mutants deficient in their ability to neutralize several regulatory proteins and determined changes in melanogenic gene expression. We identified Microphthalmia as the affected, downregulated transcription factor in melanocytes rendered amelanotic by E1A, basic fibroblast growth factor, or the oncogenes ras or neu, and in an amelanotic cell variant of Cloudman S91 mouse melanoma. Against expectations, sequestration of p300, a transcriptional adaptor that mediates responses to cyclic adenosine monophosphate, was not required for the full transforming effects of E1A. Our results suggest that in addition to controlling tyrosinase (albino locus) and tyrosinase-related protein 1 (TR-P1/gp75/brown locus), both known to possess the DNA consensus site for binding the Microphthalmia protein, this transcription factor also controls other melanocyte-specific genes such as pink-eyed dilution and Pmel 17 (silver), but not tyrosinase-related protein 2 (slaty locus). Furthermore, these findings show that microphthalmia is downregulated not only by experimentally introduced dominantly acting oncogenes but also by the aberrant expression of basic fibroblast growth factor and by spontaneous tumorigenic transformation.