Type I collagen is produced predominantly in mesenchymal cells, but molecular mechanisms responsible for cell type-specific expression are virtually unknown. During fibrogenic process in the liver, activated hepatic stellate cells (HSC) are the main producers of type I collagen, whereas parenchymal hepatocytes produce little, if any, of this protein. We have previously reported that Sp1 and an interacting unknown factor(s) bind to the ؊313 to ؊255 sequence of the ␣2(I) collagen gene (COL1A2) and play essential roles for basal and TGF--stimulated transcription in skin fibroblasts and HSC. Recently, Smad3 has been shown to bind to this region, and its interaction with Sp1 has been implicated in TGF--elicited COL1A2 stimulation. The present study demonstrates predominant binding of Sp3 rather than Sp1 to this regulatory element in parenchymal hepatocytes. In these cells, this region did not exhibit strong enhancer activity or mediate the effect of TGF-. Transfection of HSC with an Sp3 expression plasmid abolished the COL1A2 response to TGF-, whereas overexpression of Sp1 in hepatocytes increased basal COL1A2 transcription and conferred TGF- responsiveness. Functional and physical interactions between Sp1 and Smad3, but not between Sp3 and Smad3, were demonstrated using the bacterial GAL4 system and immunoprecipitationWestern blot analyses. These results indicate that cell lineage-specific interactions between GC box binding factors and Smad protein(s) may account, at least in part, for differential COL1A2 transcription and TGF- responsiveness in HSC and parenchymal hepatocytes.Type I collagen, the major component of extracellular matrix in various organs, is produced predominantly in mesenchymal cells such as fibroblasts, osteoblasts, and myofibroblasts. It is composed of two ␣1 chains and one ␣2 chain, which are coordinately expressed but encoded by the distinct genes, COL1A1 1 and COL1A2, respectively. Transforming growth factor-1 (TGF-1, henceforth referred to as TGF-) plays important roles in stimulating type I collagen gene expression mainly at the levels of transcription (1). In the liver, it has been widely accepted that activated hepatic stellate cells (HSC) showing the morphological and functional features of myofibroblasts are the main producers of type I collagen (2, 3). By contrast, parenchymal hepatocytes produce little, if any, collagen during hepatic fibrogenesis (4, 5). Recent studies by us and others have indicated that both COL1A1 (6) and COL1A2 (7) transgenes are expressed in mesenchymal cells, but not in parenchymal hepatocytes, after carbon tetrachloride administration into transgenic mice harboring collagen promoter-reporter gene constructs. These results further confirmed the minor contribution of hepatocytes to collagen production. However, very little is known regarding the molecular mechanisms determining differential type I collagen gene expression in activated HSC and parenchymal hepatocytes.We have previously shown that similar regulatory mechanisms control COL1A2 transcription...