It has been shown previously that the FGF‐4 gene is regulated by a powerful downstream enhancer in embryonal carcinoma (EC) cells. This enhancer contains an essential HMG motif; however, the transcription factor that binds to the HMG motif in EC cells has not been determined definitively. In earlier studies, this HMG motif was shown to bind a heat‐stable, redox‐insensitive factor expressed by F9 EC cells. Others have proposed that the transcription factor Sox‐2 binds to the FGF‐4 enhancer HMG motif. In this study, we demonstrate that the N‐terminal half of Sox‐2, which contains the DNA binding domain, binds to the FGF‐4 enhancer HMG motif and we show that this binding is unaffected by heat and oxidation. In addition, we employed two experimental approaches to demonstrate that Sox‐2 regulates the transcription of the FGF‐4 gene in EC cells. As part of these studies, an expression plasmid that codes for a dominant‐negative form of Sox‐2 was used in transient expression assays. In other experiments, a Sox‐2 antisense expression plasmid was used. When co‐transfected into F9 EC cells along with an FGF‐4 promoter/reporter gene construct, each expression plasmid caused a significant reduction in reporter activity. Our studies also demonstrate that Sox‐2 affects the expression of the FGF‐4 gene in the multipotent EC cell line, P19. Taken together, these studies argue strongly that Sox‐2 plays an important role in the expression of the FGF‐4 gene in vivo. Mol. Reprod. Dev. 50:377–386, 1998. © 1998 Wiley‐Liss, Inc.