The carbamoyl-phosphate synthetase I gene is expressed in the periportal region of the liver, where it is activated by glucocorticosteroids and glucagon (via cyclic AMP), and in the crypts of the intestinal mucosa. The enhancer of the gene is located 6.3 kilobase pairs upstream of the transcription start site and has been shown to direct the hormone-dependent hepatocyte-specific expression in vitro. To analyze the function of the upstream region in vivo, three groups of transgenic mice were generated. In the first group the promoter drives expression of the reporter gene, whereas the promoter and upstream region including the far upstream enhancer drive expression of the reporter gene in the second group. In the third group the far upstream enhancer was directly coupled to a minimized promoter fragment. Reporter-gene expression was virtually undetectable in the first group. In the second group spatial, temporal, and hormonal regulation of expression of the reporter gene and the endogenous carbamoyl-phosphate synthetase gene were identical. The third group showed liver-specific periportal reporter gene expression, but failed to activate expression in the intestine. These results show that the upstream region of the carbamoyl-phosphate synthetase gene controls four characteristics of its expression: tissue specificity, spatial pattern of expression within the liver and intestine, hormone sensitivity, and developmental regulation. Within the upstream region, the far upstream enhancer at -6.3 kilobase pairs is the determinant of the characteristic hepatocyte-specific periportal expression pattern of carbamoyl-phosphate synthetase.