The von Hippel-Lindau tumor suppressor gene (VHL) has a critical role in the pathogenesis of clear-cell renal cell carcinoma (RCC), as VHL mutations have been found in both von Hippel-Lindau disease-associated and sporadic RCCs. Recent studies suggest that vascular endothelial growth factor (VEGF) mRNA is upregulated in RCC- and von Hippel-Lindau disease-associated tumors. We have therefore assessed the effect of the VHL gene product on VEGF expression. VEGF promoter-luciferase constructs were transiently cotransfected with a wild-type VHL (wt-VHL) vector in several cell lines, including 293 embryonic kidney and RCC cell lines. wt-VHL protein inhibited VEGF promoter activity in a dose-dependent manner up to 5- to 10-fold. Deletion analysis defined a 144-bp region of the VEGF promoter necessary for VHL repression. This VHL-responsive element is GC rich and specifically binds the transcription factor Sp1 in crude nuclear extracts. In Drosophila cells, cotransfected VHL represses Sp1-mediated activation but not basal activity of the VEGF promoter. We next demonstrated in coimmunoprecipitates that VHL and Sp1 were part of the same complex and, by using a glutathione-S-transferase-VHL fusion protein and purified Sp1, that VHL and Sp1 directly interact. Furthermore, endogenous VEGF mRNA levels were suppressed in permanent RCC cell lines expressing wt-VHL, and nuclear run-on studies indicated that VHL regulation of VEGF occurs at least partly at the transcriptional level. These observations support a new mechanism for VHL-mediated transcriptional repression via a direct inhibitory action on Sp1 and suggest that loss of Sp1 inhibition may be important in the pathogenesis of von Hippel-Lindau disease and RCC.