Previous studies have shown that the transcription of the fibroblast growth factor-4 (FGF-4) gene is regulated by a powerful enhancer located approximately three kilobases downstream of the transcription start site. Several conserved cis-regulatory elements in the promoter and the enhancer have been identified, including two Sp1 motifs located in the promoter and one Sp1 motif located in the enhancer. Each of these Sp1 motifs has been shown previously to bind the transcription factors Sp1 and Sp3 in vitro. The main objective of this study was to examine the potential interaction of the FGF-4 promoter and enhancer Sp1 motifs. Using site-directed mutagenesis, we demonstrate that disruption of these sites, individually or in combination, reduce the expression of FGF-4 promoter/reporter gene constructs in embryonal carcinoma cells. Importantly, we demonstrate that disruption of the enhancer Sp1 motif exerts a more pronounced effect on the expression of these constructs than disruption of the promoter Sp1 motifs. We also demonstrate that changing the spacing and the stereo-alignment of the enhancer Sp1 motif, relative to the other cis-regulatory elements of the enhancer, has little effect on the ability of the enhancer to stimulate transcription. Furthermore, embryonic stem cells that contain two disrupted Sp1 alleles were used to demonstrate that the transcription factor Sp1 is not necessary for expression of the endogenous FGF-4 gene. Finally, the significance of these findings relative to a looping model for the transcriptional activation of the FGF-4 gene is discussed.