Previous analysis of the human interferon-gamma (IFN-gamma promoter indicated that the region of DNA from -251 to -215 (designated here as BE (binding element)) possessed silencer activity, as deletion of this region caused an increase in promoter activity. Based on this finding, we have conducted a series of experiments to characterize BE function and analyze the binding proteins which interact with this region. Transient transfection assays in the Jurkat T cell line revealed that the BE region possesses silencer activity, which is orientation-dependent when reinserted 5' to the IFN-gamma core promoter. However, when the BE region was inserted in front of a heterologous promoter (thymidine kinase (TK)), a mild enhancer activity was observed. Utilizing the electrophoretic mobility shift assay, we have identified two major DNA-protein complexes (designated as S and E complexes) which interact with this region. Mutational analysis indicated that the silencer activity observed with the IFN-gamma promoter correlated with the S complex and the enhancer activity correlated with the E complex. Preliminary characterization of these two DNA-protein complexes has demonstrated the presence of multiple proteins in each complex. We have found that the S protein complex has a recognition sequence similar to the nuclear factor AP2, and we have identified the nuclear factor Yin-Yang 1 (YY1) as one of the proteins in the E complex.