Sequential activation of cell type-specific genes occurs during osteoblast development. The promoter of one such gene, osteocalcin, has been widely studied, but the DNA sequences that govern osteoblast-specific expression have not been defined. The proximal osteocalcin promoter linked to pTKCAT directs strong promoter activity in osteoblast-like ROSI 7 / 2 3 cells and comparatively weak promoter activity in nonosteoblastic NIH3T3 cells. To identify sequences important in conferring cell-specific expression of the osteocalcin gene, a deletion series of the human proximal promoter was constructed and the activities assessed in ROSI 7 / 2 3 and NIH3T3 cells. These studies identified a 30 bp sequence within the proximal promoter (osteocalcin repressor element-1 [ORE-1 I) which is responsible for repressing the transcriptional activity in NIH3T3 cells. In electrophoretic mobility shift assays from both NIH3T3 and ROSI 7/2.8 cells, a protein complex bound to the ORE-1 that was related to a complex which binds the G/C-rich repressor element in the collagen type I (a1 ) promoter. In addition, there was a second complex from NIH3T3 cells but not ROSI 7/2.8 cells that bound the ORE-1 fragment. The presence of this additional factor in NIH3T3 cells parallels the observation that constructs carrying the ORE-1 sequence have repressed promoter activity relative to the analogous constructs lacking the ORE-1 when transfected into NIH3T3 and suggests that the NIH3T3-specific factor is a repressor. These data indicate that the G/C element in the ORE-1 contributes to the repression of osteocalcin gene transcription in a nonosteoblast cell line. The high homology between the ORE-1 sequence and a related sequence in the collagen type I (012) proximal promoter suggests that homologous regions in other osteoblast-expressed genes may function similarly.