Previous studies identified a 115-base pair (bp) region of the farnesyl diphosphate (FPP) synthase promoter which is involved in the transcriptional regulation of this gene by sterols (Spear, D. H., Kutsunai, S. Y., Correll, C. C., and Edwards, P. A. (1992) J. Biol. Chem. 267, 14462-14469). In the current study we fused a 117-bp fragment, containing this region of interest, upstream of the heterologous minimal promoter of the herpes simplex virus thymidine kinase gene linked to the chloramphenicol acetyltransferase (CAT) reporter gene. Chinese hamster ovary (CHO) cells were stably transfected with this fusion gene and incubated in the absence or presence of sterols. Analysis of CAT mRNA by primer extension indicated that transcription of the fusion gene was under sterol-mediated control. Thus, when cellular sterols were present, the CAT mRNA levels were reduced 2-4-fold. To further localize the FPP synthase sterol-responsive element(s), additional promoter-reporter gene constructs containing either deletions or mutations were constructed and transfected into CHO or CV-1 cells. These studies localized a 6-bp region (ATTGGC) that is required for both transcriptional induction in the absence of sterols and transcriptional repression in the presence of sterols. Gel shift and footprinting analyses demonstrated that nuclear proteins isolated from CHO cells bound to six distinct regions of the promoter between nucleotides -293 to -47. Taken together, these results further define both the cis-acting elements controlling normal transcription of the FPP synthase gene and identify a novel sequence involved in sterol regulation.