Fusion of mouse CD8+ class I MHC-restricted T cells with the BW5147 thymoma invariably yields CD8- hybridomas in which RNA transcribed from the CD8 alpha (Lyt-2) gene is undetectable. To determine whether cis-acting DNA sequences may negatively regulate transcription of the Lyt-2 gene in BW5147 cells, one possible explanation for the above observation, BW5147 cells were stably transfected with the Lyt-2 gene containing 1 - 11,000 nucleotides of 5' flanking DNA and surface expression of Lyt-2 was monitored by flow microfluorometry. Initial results suggested the presence of a negative element between 1400 and 5000 nucleotides upstream of the site of transcription initiation. Further studies suggested the presence of two potential negative regulatory elements in this region, one of which includes a 269 nucleotide Accl - SstI fragment comprised of nucleotides -4700 to -4431 which bound nuclear proteins from CD8+ and CD8- cell lines in electrophoretic mobility shift assays (EMSA). EMSA studies performed using nuclear extracts from a variety of cell lines and tissues demonstrated that unique retarded complexes, called bands 1 and 2, correlated significantly with expression or non-expression of Lyt-2 respectively. EMSA analysis of proteins fractionated by SDS-PAGE from nuclear extract of the CD8+ VL3 T lymphoma cell line revealed proteins of approximately 110-130 kDa (called L2a-P1) and > 200 kDa (called L2a-P2) which bind within a 100 nucleotide region of this fragment (called L2a) to yield band 1 and 2 respectively, and which may play a role in regulation of Lyt-2 gene transcription.