The transcription factor Sp1 plays a key role in the activation of many cellular and viral gene promoters, including those that are regulated during the cell cycle. However, recent evidence indicates that Sp1 belongs to a larger family of factors which bind G/C box elements in order to either activate or repress transcription. Sp3, a member of this family, functions to repress transcriptional activation in two viral promoters, most likely by competing with Sp1 for GC box/Sp binding sites. However, the physiological role of Sp3 in the repression of endogenous cellular promoters has not been experimentally addressed. In the present study, we analyze the activity and binding of Sp3 on several eukaryotic promoters that contain G/C boxes and are known to be regulated during cellular proliferation and the cell cycle. Using antibodies specific for Sp1 and Sp3, we observe that both of these factors localize to the cell nucleus and have a similar, dispersed subnuclear distribution. Further, using gel mobility shift assays, we show that both Sp1 and Sp3 interact specifically with the histone H4 promoter. Transient cotransfections of Drosophila cells with Sp1 and Sp3 expression vectors and with the histone H4, thymidine kinase (TK), or dihydrofolate reductase (DHFR) promoters show that only the DHFR promoter, containing multiple functional GC boxes, displays Sp3 repression of Sp1 activation. In contrast, the single G/C boxes within the histone H4 or TK promoters, which confer transcriptional activation via Sp1 binding, are not responsive to repression by Sp3. Therefore, we demonstrate that the endogenous cellular DHFR promoter is selectively responsive to Sp3 repression. The data suggest that Sp3 may contribute to the control of proliferation- and/or cell-regulated promoters depending upon the context and/or number of functional Sp1 binding sites.