Human sterol 27-hydroxylase catalyses the first step in the alternative pathway of bile acids biosynthesis in hepatocytes. However the gene encoding this enzyme (CYP27 gene) is expressed in every tissue and some evidence suggests that this enzyme plays a role in cholesterol homeostasis. Although modulation of CYP27 expression has been reported, the mechanisms underlying the regulation of this gene in human tissues is still poorly understood. To elucidate the mechanism governing CYP27 expression we cloned a 4.3 kb fragment of the 5' flanking region of the human CYP27 gene and constructed deletion mutants which were transfected into HepG2 cells. Functional assays showed that the -217/-10 nucleotide region from the translation start site (minimal promoter), devoid of TATA and CAAT boxes, contains all the elements for basal transcription. Foot-printing analysis of minimal promoter showed four protected regions (A-D). Regions A, B and D each contain one Sp1 binding site, and region C contains a HNF4 site. Electrophoretic mobility shift assays demonstrated that Sp1, Sp3 and HNF4 transcription factors bind these sites. Mutagenesis of any of these sites resulted in the loss of promoter activity. Co-transfection of the minimal promoter with Sp1 and Sp3 expression vectors transactivated CYP27 gene promoter in Drosophila SL2 cells, which lack endogenous Sp proteins. Transactivation of the minimal promoter was also observed in HeLa cells co-transfected with HNF4 expression vector. Therefore, Sp1, Sp3 and HNF4 co-operate in the expression of the human CYP27 gene in HepG2 cells.