Previous studies have shown that interferon-gamma (IFN-gamma) inhibits type I collagen gene expression through both transcriptional and post-transcriptional mechanisms (Kahäri et al., 1990). In the present study, using transient cell transfections of human dermal fibroblast cultures with a series of 5' deletion promoter/CAT reporter gene constructs, we have identified the IFN-gamma-response element of the human alpha 2(I) collagen gene (COL1A2) promoter. Specifically, we have identified a segment of the proximal promoter region, located between nucleotides -161 and -125 relative to the transcription start site, as critical for down-regulation of COL1A2 promoter activity by IFN-gamma. This IFN-gamma response element (IgRE) is clearly distinct from the previously described tumor necrosis factor-alpha response element (TaRE) located between nucleotides -265 and -241 of the COL1A2 promoter, a difference which is likely to explain the additive inhibitory effect of these two cytokines. The inhibitory effect of IFN-gamma was dose-dependent and rapidly induced, requiring less than 5 min exposure of fibroblast cultures. Gel mobility shift assays indicated that a highly specific nuclear protein complex bound to this 37-base pair region of promoter. Competition experiments with oligonucleotides spanning discrete segments of this promoter region mapped the binding element within a distinctive pyrimidine-rich sequence. Point mutations within the latter revealed that this element plays a crucial role not only in the IFN-gamma response, but also in the basal activity of the proximal promoter. Substitution mutations within the IgRE of the -161/CAT construct attenuated the promoter response to IFN-gamma, as measured in transient cell transfections, and eliminated specific DNA/protein complex formation, as measured by gel mobility shift assay. UV-crosslinking experiments indicated that two DNA/protein complexes were formed with the IgRE, with molecular weights around 55 kDa and 30 kDa, corresponding to proteins of approximately 30 kDa and approximately 6 kDa, respectively. Our results further clarify the molecular mechanisms involved in the regulation of type I collagen gene expression by IFN-gamma.