Suberoylanilide hydroxamic acid (SAHA) is a novel histone deacetylase inhibitor with high potency in inducing differentiation of cultured murine erythroleukemia cells. We have recently demonstrated that SAHA induces cell cycle arrest and apoptosis in human breast cancer cells, accompanied by up-regulation of the cyclin-dependent kinase inhibitor, p21WAF1/CIP1, via a p53-independent mechanism. In this study, we used p21 gene expression as a model system to elucidate the molecular mechanism(s) underlying SAHA-mediated gene activation. Treatment of human breast cancer cell line MCF7 cells with SAHA induced p21 mRNA as a consequence of an immediate-early gene activation. Moreover, SAHA activated the p21 promoter primarily through two Spl sites located at -82 and -69 relative to the transcription start site. Furthermore, Sp1 and Sp3 proteins were the major factors binding to the Spl site of the p21 promoter. However, SAHA did not alter their DNA binding activities, suggesting that SAHA mediates p21 promoter activity by a mechanism other than altering the DNA binding activities of Sp1 and Sp3. Further studies using the GAL4 luciferase assay system demonstrated that both GAL4-Sp1 and GAL4-Sp3 fusion proteins supported SAHA-mediated gene activation from a promoter driven by five GAL4 DNA binding sites, and that GAL4-Sp3 fusion protein was suppressive in the absence of SAHA treatment. Collectively, our results suggest that SAHA activates the p21 promoter through the Spl sites, and that both Spl and Sp3 proteins can mediate SAHA-induced gene activation.