The promoter of the rat alpha-fetoprotein (AFP) gene, which makes the expression of the developmentally regulated AFP gene specific to the liver, is a putative target for transcription factors of the CAAT/enhancer-binding protein (C/EBP), hepatocyte nuclear factor-1 (HNF-1) and nuclear factor-1 (NF-1) families. We have evaluated the influence of these factors on the activity of the AFP promoter by transfection of HepG2 hepatoma cells with the appropriate expression vector plus a CAT plasmid under the control of the AFP promoter. A similar plasmid bearing the rat albumin promoter was used as a control. C/EBP alpha, C/EBP beta and D-binding protein (DBP) acted as trans-activators on the AFP promoter, whereas liver inhibitory protein (LIP), a truncated form of C/EBP beta, was a potent negative regulator of the promoter. C/EBP alpha also bound to and stimulated the activity of the AFP enhancer at -2.5 kb. Interestingly, HNF-1 beta was found to be more potent than HNF-1 alpha in activating the AFP promoter. This effect was specific, as it did not occur with the rat albumin promoter. HNF-1 beta, which is produced earlier than HNF-1 alpha during liver development, would thus have the greater influence on the AFP promoter in early development. Both HNF-1s allowed expression of the AFP promoter in cells of nonhepatic origin. Overexpression of NF-1 induced a specific decrease in the activity of the AFP promoter. This strongly suggests that competition between NF-1 and HNF-1 for binding to their overlapping binding sites on the AFP promoter is critical for modulating its activity. Thus changing combinations of these trans-acting factors may tightly modulate the AFP promoter activity in the course of liver development and carcinogenesis.