The recently described NK2 family of homeodomain proteins are key developmental regulators. In Drosophila melanogaster, two members of this family, bagpipe and tinman, are required for visceral and cardiac mesoderm formation, respectively. In vertebrates, tinman appears to represent a family of closely related NK2 genes, including Nkx-2.5, that are expressed at an early stage in precardiac cells. Consistent with a role for Nkx-2.5 in heart development, inactivation of the Nkx-2.5 gene in mice causes severe cardiac malformations and embryonic lethality. However, little is known about the molecular action of Nkx-2.5 and its targets in cardiac muscle. In this paper, we report the identification and characterization of a functional and highly conserved Nkx-2.5 response element, termed the NKE, in the proximal region of the cardiac atrial natriuretic factor (ANF) promoter. The NKE is composed of two near-consensus NK2 binding sites that are each able to bind purified Nkx-2.5. The NKE is sufficient to confer cardiac cell-specific activity to a minimal TATAcontaining promoter and is required for Nkx-2.5 activation of the ANF promoter in heterologous cells. Interestingly, in primary cardiocyte cultures, the NKE contributes to ANF promoter activity in a chamber-and developmental stage-specific manner, suggesting that Nkx-2.5 and/or other related cardiac proteins may play a role in chamber specification. This work provides the identification of a direct target for NK2 homeoproteins in the heart and lays the foundation for further molecular analyses of the role of Nkx-2.5 and other NK2 proteins in cardiac development.