The activity of the exogenous, full-length insulin-like growth factor-2 (IGF-2) P3 promoter is significantly up-regulated during the logarithmic growth phase but rapidly declines in confluent CaCo2 cells undergoing differentiation. Nuclear run-on assays confirmed cell density-dependent regulation of endogenous P3 promoter. To identify regulatory elements in the P3 promoter that may be required for regulating cell density-dependent transcriptional activity, we used the methods of promoter truncation, electrophoretic mobility shift assay, DNase footprinting, and mutation analysis. The relative activity of the full-length (-1229/+140) and truncated (-1090/+140) promoter was identical, being approximately 19, 27, 7, and 3% of pSV-luc activity on days 3, 5, 7, and 9 of cell culture, respectively. However, truncation to -1048 resulted in complete loss of cell density-dependent down-regulation of P3 promoter activity on days 7 and 9, suggesting the presence of regulatory elements between -1091 and -1048 sequence. Further stepwise truncation to -515 did not change promoter activity. Truncation to -138/+140 resulted in complete loss of promoter activity, suggesting that the core promoter was within the -515/-138 segment. A 14-base pair footprint (-1084/-1070) was identified by DNase footprinting within the distal -1091/-1048 segment. Electrophoretic mobility shift assay with wild type and mutant probes confirmed the presence of a novel 7-base pair (CGAGGGC) (-1084/-1078) cis element (P3-D); its mutation abolished binding. Functionality of P3-D cis element was confirmed by measuring the activity of core P3 promoter ligated to distal P3 segment containing either the mutant or wild type P3-D element. We have, therefore, identified a novel cis element, P3-D, that appears to play a critical role in regulating IGF-2 P3 promoter activity in a cell density/differentiation-dependent manner.