Abstract:  Previous studies of epidermal‐specific gene promoters suggested that a limited set of transcription factors regulate keratinocyte‐specific and differentiation‐specific gene expression in the epidermis. In the present study, we investigated the functional importance of AP‐1‐ and Sp1‐binding elements in the determination of cell type‐specific and differentiation‐specific gene expression by transient transfection into undifferentiated and differentiated keratinocytes as well as into various non‐epidermal cell lines. Synthesized short AP‐1‐ and/or Sp1‐binding elements were inserted into a minimal reporter vector, and the artificial promoter containing both AP‐1 and Sp1 elements showed high levels of transcriptional activity only when transfected into differentiated keratinocytes. Promoters containing either the AP‐1 or the Sp1 motif alone showed little activity in any of the cells examined. We also found that close proximity of the Sp1 and AP‐1 sites is essential for transcriptional activity, suggesting that the physical interaction between Sp1 and AP‐1 factors is important for functional activity. These results clearly demonstrate that the combination of ubiquitously expressed transcription factors AP‐1 and Sp1 confers keratinocyte specificity and differentiation specificity on the gene expression. Our findings also provide a simple model of the mechanisms underlying regulation of cell type‐specific and cell differentiation‐specific gene expression by ubiquitously expressed transcription factors.