We have previously described a 160-bp enhancer (BCE-1) in the bovine -casein gene that is activated in the presence of prolactin and extracellular matrix (ECM). Here we report the characterization of the enhancer by deletion and site-directed mutagenesis, electrophoretic mobility shift analysis, and in vivo footprinting. Two essential regions were identified by analysis of mutant constructions: one binds C/EBP- and the other binds MGF/STAT5 and an as-yet-unidentified binding protein. However, no qualitative or quantitative differences in the binding of these proteins were observed in electrophoretic mobility shift analysis using nuclear extracts derived from cells cultured in the presence or absence of ECM with or without prolactin, indicating that prolactin-and ECM-induced transcription was not dependent on the availability of these factors in the functional cell lines employed. An in vivo footprinting analysis of the factors bound to nuclear chromatin in the presence or absence of ECM and/or prolactin found no differences in the binding of C/EBP- but did not provide definitive results for the other factors. Neither ECM nor prolactin activated BCE-1 in transient transfections, suggesting that the chromosomal structure of the integrated template may be required for ECM-induced transcription. Further evidence is that treatment of cells with inhibitors of histone deacetylase was sufficient to induce transcription of integrated BCE-1 in the absence of ECM. Together, these results suggest that the ECM induces a complex interaction between the enhancer-bound transcription factors, the basal transcriptional machinery, and a chromosomally integrated template responsive to the acetylation state of the histones.It is now well established that the processes of development and differentiation depend on a cell's ability to correctly perceive its microenvironment (reviewed in references 1 and 43). A key component of this environment is the extracellular matrix (ECM). The ECM is an organized network of glycoproteins, proteoglycans, and glycosaminoglycans, components important for cell morphology as well as for signal transduction via cell surface integrins and ultimately for tissue-specific gene expression (reviewed in reference 43).The mammary gland appears to be particularly well suited for the study of ECM-induced differentiation and gene expression. In the adult animal, the gland develops after puberty and functionally differentiates in response to pregnancy. The mechanisms involved in these developmental processes are complex and guided by various hormones (54), growth factors (53), and the ECM (3). Milk protein expression is initiated at mid-pregnancy and correlates with the synthesis and deposition of a specialized laminin-rich ECM during alveolar development. Expression of these milk proteins can be used as markers for the differentiated state of the gland. In the last decade, a number of model systems using mammary epithelial cells to study ECM-dependent gene regulation have been developed. These range from primar...