GLI is the prototype for the Gli-Kruppel gene family characterized by a consensus C2-H2 zinc finger domain and is believed to function as a transcription activator in the vertebrate Sonic hedgehog-Patched signal transduction pathway. Understanding GLI gene regulation may be of importance to understanding causes of human birth defects and cancer. To begin to understand the regulation of this developmentally important gene we have cloned the human GLI gene and functionally characterized its 5' flanking region. The GLI gene is composed of 12 exons and 11 introns and in the zinc finger coding region shares a highly conserved splicing pattern with several other Gli family members in both vertebrates and C. elegans. A major transcription initiation site was identified upstream of the GLI translation start site along with three minor transcription initiation sites. The region surrounding the transcription initiation sites lacks TATA and CCAAT consensus sequences, has a high GC content, includes a CpG island, and contains several GC boxes. A 487bp segment surrounding the transcription initiation sites increased expression of a luciferase reporter gene 15-fold in Tera-1 cells and was defined as the core promoter region of human GLI. In transgenic mice this region directed beta-galactosidase expression to the central nervous system on embryonic days 10.5-12.5 and to sites of endochondral ossification on embryonic days 12.5 and 13.5 in a pattern comparable to the endogenous expression pattern of mouse gli within these tissues. The previously identified gastrointestinal expression of gli was not driven by this region and may require elements outside of the core promoter. Sequence analysis of the 5' flanking region of the mouse gli gene and the full-length mouse gli cDNA demonstrated high homology with human GLI, suggesting conservation of GLI regulation and function.