The mouse keratocan gene (Ktcn) expression tracks the corneal morphogenesis during eye development and becomes restricted to keratocytes of the adult, implicating a cornea-specific gene regulation of the mouse Ktcn [J. Biol. Chem., 273 (1998) 22584-22588]. To examine the functionality of the mouse Ktcn promoter, we have cloned and sequenced a 3.2kb genomic DNA fragment 5' of the mouse Ktcn gene, which was used to prepare a reporter gene construct that contained the 3.2kb 5' flanking sequence, exon 1 and 0.4kb of intron 1 of Ktcn, and beta-geo hybrid reporter gene. The beta-galactosidase (betaGal) activity was assayed in tissues of two of five transgenic mouse lines obtained via microinjection. In adult transgenic mice, betaGal activity was detected only in cornea, not in other tissues (e.g. lens, retina, sclera, lung, heart, liver, diaphragm, kidney, and brain). During ocular development, the spatial-temporal expression patterns of the betaGal recapitulated that of endogenous Ktcn in transgenic mice. Using XGal staining, strong betaGal activity was first detected in periocular tissues of E13.5 embryos, and restricted to corneal keratocytes at E14.5 and thereafter. Interestingly, in addition to cornea, betaGal activity was transiently found in some non-ocular tissues, i.e. ears, snout, and limbs of embryos of E13.5 and E14.5 but was no longer detected in those tissues of E16.5 embryos. The transient expression of endogenous keratocan in non-ocular tissues during embryonic development was confirmed by in situ hybridization. Taken together, our results suggest that the 3.2kb Ktcn promoter contains sufficient cis-regulatory elements to drive heterologous minigene expression in cells expressing keratocan. The identification of keratocyte-specific expression of betaGal reporter gene in the adult transgenic mice is an important first step in characterizing the Ktcn promoter in order to use it to drive a foreign gene expression in corneal stroma.