Cbfa1 is a critical regulator of cell differentiation expressed only in the osteochondrogenic lineage. To define the molecular basis of this cell-specific expression we analyzed the murine Cbfa1 promoter. Here we show that the first 976 bp of this promoter are specifically active in osteoblastic cells. Within this region DNase I footprinting delineated a 40-bp area (CE1) protected differently by nuclear extracts from osteoblastic cells and from non-osteoblastic cells. When multimerized, CE1 conferred an osteoblast-specific activity to a heterologous promoter in DNA transfection experiments; this enhancing ability was conserved between mouse, rat, and human CE1 present in the respective Cbfa1 promoters. CE1 site-specific mutagenesis determined that it binds NF1- and AP1-like activities. Further analyses revealed that the NF1 site acts as a repressor in non-osteoblastic cells due to the binding of NF1-A, a NF1 isoform not expressed in osteoblastic cells. In contrast, the AP1 site mediates an osteoblast-specific activation caused by the preferential binding of FosB to CE1 in osteoblastic cells. In summary, this study identified an osteoblast-specific enhancer in the Cbfa1 promoter whose activity is achieved by the combination of an inhibitory and an activatory mechanism.