We have studied the mechanism by which 5'-flanking sequences modulate the in vitro transcription of eucaryotic tRNA genes. Using deletion and linker substitution mutagenesis, we have found that the 5'-flanking sequences responsible for the different in vitro transcription levels of three Drosophila tRNA5.' genes are contained within a discrete region centered 22 nucleotides upstream from the transcription initiation site. In conjunction with the A-box intragenic control region, this upstream transcription-modulatory region functions in the selection mechanism for the site of transcription initiation. Since the transcription-modulatory region directs the position of the start site and the actual sequence of the transcription-modulatory region determines the level of tRNAAsn gene transcription, the possibility is raised that the transcription-modulatory region directs a transcription initiation event similar to open complex formation at procaryotic promoters.In procaryotic organisms, initiation of RNA synthesis is controlled by small, conserved DNA sequences located 10 and 35 nucleotides upstream of the transcription initiation site. RNA polymerase holoenzyme recognizes and binds these regions in this first step of the pathway that leads to open-complex formation and transcriptional activation (5, 42). The three nuclear RNA polymerases of eucaryotes do not recognize promoters efficiently and, as a result, are unable to independently initiate gene-specific transcription (for a review, see reference 38). Instead, eucaryotic transcription is dependent upon promoter-specific transcription factors that recognize and bind discrete sequence elements. Current models suggest that the binding of these protein factors activates transcription by allowing each gene to be recognized by the appropriate polymerase. For RNA polymerases I and II, the known sites of transcription factor interaction are 5' of the site of transcription initiation (9,15,45). For RNA polymerase III-directed transcription of eucaryotic 5S RNA, tRNA and adenovirus VA RNA genes, the sites of transcription factor interaction are 3' of the transcription initiation site, within the sequences encoding the RNA (6,16,17,48,50). RNA polymerase III-directed transcription of 7SL RNA, 7SK RNA, and U6 RNA genes requires enhancerlike sequence elements for transcription factor interaction 5' of the transcription initiation site, similar to RNA polymerase II promoters (3,7,30,47).The intragenic control regions (ICRs) in tRNA genes, the A-and B-box ICRs, contain the DNA sequence determinants that direct transcription factor activities (reviewed in reference 40). For tRNA genes, the transcription factors bind to the gene to form a complex that is stable throughout multiple rounds of transcription initiation (4,23,36). This stable complex, comprised of tRNA gene and transcription factors, is considered to form the recognition substrate for RNA polymerase III.Transcriptional activity of tRNA genes is particularly sensitive to mutations in the A-and B-box ICRs. All of the po...