Human involucrin (hINV) is a keratinocyte protein that is expressed in the suprabasal compartment of the epidermis and other stratifying surface epithelia. Involucrin gene expression is initiated early in the differentiation process and is maintained until terminal cell death. The distal regulatory region (DRR) is a segment of the hINV promoter (nucleotides -2473/-1953) that accurately recapitulates the normal pattern of suprabasal (spinous and granular layer) expression in transgenic mouse epithelia. To identify sequences that mediate expression at specific stages of differentiation, we divided the DRR into two segments, a 376 nucleotide upstream region (DRR(-2473/-2100)) and a 147 nucleotide downstream region (DRR(-2100/-1953)), and evaluated the ability of these sequences to drive expression in transgenic mice. The DRR(-2473/-2100) segment drives expression at a level comparable to that observed for the DRR, but expression is restricted to the upper granular layers (i.e., no spinous layer expression). In contrast, the DRR(-2100/-1953) segment does not drive expression. However, reassembling the DRR restores the complete range of expression. These results suggest that two distinct, spatially-separate elements are required to specify the complete differentiation-dependent program of involucrin gene expression. To identify specific transcription factor binding sites involved in this regulation, we mutated an activator protein-1 binding site, AP1-5, located within DRR(-2473/-2100) segment. This site binds AP1 transcription factors present in mouse epidermal extracts, and its mutation eliminates appropriate hINV expression. This result suggests that AP1 factors participate as components of a multi-component transcription factor complex that is required for regulation.