The dipeptidyl peptidase IV gene encodes a plasma-membrane exopeptidase that is highly expressed in small intestine, lung and kidney. In order to better understand the mechanisms responsible for this tissue-specific expression we cloned, sequenced and functionally characterized the 5′-flanking region of the human dipeptidyl peptidase IV gene. The first 500 bases of the 5′-flanking sequence constituted an unmethylated CpG island, contained several Sp1-binding sites and lacked a consensus TATA box, all characteristics of gene promoters lacking tissue-specific expression. RNase-protection analysis using both small intestinal and Caco2 cell RNA indicated that the dipeptidyl peptidase IV transcript was initiated from no fewer than six major and 12 minor start sites. The 5′-flanking sequence also exhibited functional promoter activity in transient transfection experiments. Here, various lengths of the sequence were cloned upstream of a luciferase gene and introduced into cultured cells using lipofectin. A region located between bases -150 and -109 relative to the start of translation was found to be important for high-level promoter activity in both Caco2 and HepG2 cells. Moreover, Caco2 cells and HepG2 cells, which express high levels of dipeptidyl peptidase IV activity, exhibited much higher normalized luciferase activity after transfection than did 3T3, Jurkat or COS-7 cells, which have low enzyme levels. Sodium butyrate was found to increase both enzyme activity and normalized luciferase in HepG2 cells. Thus the dipeptidyl peptidase IV promoter possesses the ability to initiate transcription in a tissue-specific fashion in spite of having the sequence characteristics of a housekeeping gene promoter.