We have characterized in the accompanying paper (P. Herbomel, A. Rollier, F. Tronche, M.-O. Ott, M. Yaniv, and M. C. Weiss, Mol. Cell. Biol. 9:4750-4758, 1989) six different elements in the albumin promoter. One of them, the proximal element (PE), is the binding site for a strictly liver specific factor, APF/HNF1. This binding site contains a bacterial DAM DNA methylase methylation target sequence which, when methylated, decreases the affinity of the protein for this element. When the different albumin promoter constructions were prepared in an Escherichia coli deoxyadenosine methylase-negative strain, the respective contributions of the elements to the overall promoter activity were strikingly different. An intact proximal element plus the TATA box gave almost full transcriptional activity in transient transfection experiments and only in differentiated hepatoma cells of line H4II, whereas the distal elements (distal element III [DEIII], the NF1-binding site DEII, and the E/CBP-binding site DEI) had become essentially dispensable. Mutations affecting the CCAAT box showed only a two- to threefold decrease. When PE was methylated, mutated, or replaced by the homologous element from the alpha-fetoprotein gene, activity in the context of the short promoter (PE plus the TATA box) was abolished. However, activity was restored in the presence of the upstream elements, showing that cooperation with factors binding to the CCAAT box and distal elements favors the functional interaction of the liver-specific APF/HNF1 factor with lower-affinity binding sites.