The 5' flanking region of the human gene for the second component of complement was sequenced and analyzed functionally. RNase protection demonstrated a cluster of four initiation sites in the 5' flanking region utilized in the hepatoma cell line, HepG2. Utilization of all four initiation sites increased in response to gamma-interferon (IFN-gamma). Transient transfection analysis was used to examine cis-acting sequence motifs controlling transcription from the 5'-flanking region. We identified a 228-bp minimal promoter fragment which was able to direct basal and IFN-gamma inducible transcription from authentic initiation sites. Sequence motifs outside of this region may modulate the transcriptional regulation of the second component of complement. Although complement components are not coordinately regulated, we identified four regions of significant homology with the promoters of multiple other complement components. Three of these regions were within the minimal promoter fragment.