Recently, a family of novel, serine/threonine protein kinases has been identified. One of these transcriptionally inducible, immediate-early genes encodes serum/glucocorticoid inducible-protein kinase, sgk. By in situ hybridization, we show that sgk expression in the rat ovary is selectively localized to granulosa cells. In culture, FSH or forskolin, activators of the protein kinase A (PKA) pathway, rapidly (2 h) and transiently increased sgk mRNA levels in undifferentiated granulosa cells. Sgk mRNA exhibited a biphasic expression pattern, with maximal levels observed at 48 h of FSH/forskolin as granulosa cells differentiate to the preovulatory phenotype. Deletion analyses using sgk promoter-reporter constructs (-4.0 kb to -35 bp) identified a region between -63 and -43 bp that mediated FSH and forskolin-responsive transcription in undifferentiated and differentiated granulosa cells. This G/C-rich region 1) conferred both basal and inducible transcription to the minimal -35 sgk promoter chloramphenicol acetyltransferase reporter construct, 2) specifically bound Sp1 and Sp3 present in granulosa cell extracts, and 3) bound recombinant Sp1. Mutation of 2 bp in this region not only prevented Sp1 and Sp3 binding, but also abolished the PKA-mediated transactivation observed when using the wild type construct. Sp1 and Sp3 DNA-binding activity and protein levels did not change significantly during sgk induction. Collectively, these data indicate that Sp1/Sp3 transactivation of the sgk promoter likely involves regulated, phosphorylation-dependent interaction with other factors. Thus the novel, biphasic induction of sgk that correlates with granulosa cell progression from proliferation to differentiation appears to involve sequential, coordinated actions of FSH, PKA, and transcription factors, including Sp1 and Sp3.