The gastrin gene is expressed in fetal pancreatic islet cells, but after birth expression is selectively repressed as the islets terminally differentiate. DNA transfection studies identified a cis regulatory domain between -108 and -76 in the gastrin promoter which controls gastrin transcription in islet cells. This cis regulatory domain comprises adjacent positive and negative elements. The negative element (-108 to -82) contains the sequence ATTCCTCT, which is also found in the negative element of the beta-interferon promoter. Gel retardation assays and DNase footprinting studies demonstrated that specific islet nuclear protein(s) bind to the gastrin negative element. In vivo competition studies demonstrated that the trans-acting factors which bind to this element specifically repress gastrin promoter activity in islet cells. Immediately downstream of the negative element lies a positive element (-82 CATATGG -76), which activates gastrin transcription in islet cells. The sequence of the positive element resembles the islet-specific enhancer elements of the insulin gene (CATCTGG/C). Gel mobility shift assays and in vivo competition studies indicate that this positive element activates the gastrin promoter by binding to the same islet cell transcription factor which binds enhancer elements in the rat insulin gene. The tandem organization of the negative and positive elements suggests that this regulatory domain may act as a switch controlling the transient transcription of the gastrin gene during fetal islet development.