Melanoma formation in Xiphophorus is caused by overexpression of the Xmrk gene. The promoter region of the Xmrk oncogene differs strikingly from the corresponding proto-oncogenic sequences and was acquired in the course of a nonhomologous recombination with another gene locus, D. In order to identify regulatory elements leading to the strong transcriptional activation of Xmrk in melanoma tissue and to contribute to an understanding of the role the regulatory locus R might play in suppressing the tumor phenotype in wild-type Xiphophorus, we performed functional analysis of the Xmrk oncogene promoter. Transient transfections in melanoma and nonmelanoma cells revealed the existence of a potent positive regulatory element positioned close to the transcriptional start site. Contained within this promoter segment is a GC-rich sequence identical to the binding site described for human Sp1. In vitro binding studies and biochemical characterizations demonstrated the existence of GC-binding proteins in fish that share immunological properties with members of the human Sp family of transcription factors and appear to be involved in the high transcriptional activation of the Xmrk oncogene. Since the identified cis element is functional in both melanoma and nonmelanoma cells, additional silencer elements suppressing Xmrk expression in nonpigment cells must exist, thereby suggesting a negative regulatory function for the genetically defined R locus.