To identify potential regulators of smooth muscle cell (SMC) differentiation, we studied the molecular mechanisms that control the tissue-specific transcriptional expression of SM alpha-actin, the most abundant protein in fully differentiated SMCs. A construct containing the region from -1 to -125 of the promoter (p125CAT) had high transcriptional activity in SMCs (57-fold > promoterless) and endothelial cells (ECs) (18-fold) but not in skeletal myoblasts or myotubes. Mutation of either of two highly conserved CC(AT-rich)6GG (CArG) motifs at -62 and -112 abolished the activity of p125CAT in SMCs but had no effect in ECs. In contrast, high transcriptional activity in skeletal myotubes, which also express SM alpha-actin, required at least 271 base pairs of the promoter (-1 to > or = -271). Constructs containing 547 base pairs or more of the promoter were transcriptionally active in SMCs and skeletal myotubes but had no activity in skeletal myoblasts or ECs, cell types that do not express SM alpha-actin. Electrophoretic mobility shift assays provided evidence for binding of a unique serum response factor-containing complex of factors to the CArG box elements in SMCs. Results indicate that: 1) transcriptional expression of SM alpha-actin in SMCs requires the interaction of the CArG boxes with SMC nucleoprotein(s); 2) expression of SM alpha-actin in skeletal myotubes requires different cis-elements and trans-factors than in SMCs; and 3) negative-acting cis-elements are important in restricting transcription in cells that do not express SM alpha-actin.