Molecular genetics approaches have been used to identify and characterize cis-acting DNA sequences required for eukaryotic gene regulation. These sequences are modular in nature, consisting of arrays of short (10- to 12-base pair) recognition elements that interact with specific transcription factors. Some transcription factors have been extensively purified and the corresponding genes have been cloned, but the mechanisms by which they promote transcription are not yet understood. Positive and negative regulatory elements that function only in specific cell types or in response to extracellular inducers have been identified. A number of cases of inducible and tissue-specific gene expression involve the activation of preexisting transcription factors, rather than the synthesis of new proteins. This activation may involve covalent modification of the protein or an allosteric change in its structure. The modification of regulatory proteins may play a central role in the mechanisms of eukaryotic gene regulation.