A negative regulatory element (NRE) is located between positions -279 and -261 relative to the transcription start site of the human insulin gene. The NRE contains at least three distinct overlapping binding sites for several nuclear proteins. These proteins may be distinguished by their interaction with mutant variants of the NRE. Mutagenesis of two of these protein-binding sites within an insulin gene fragment containing sequences from position -361 to position +112 attenuated the negative activity of the NRE, confirming the importance of these sites in the function of the NRE. When placed in isolation upstream of the herpes-simplex-virus thymidine-kinase promoter, the NRE exhibited stimulatory activity in non-beta (BHK) and beta (HIT) cells. The positive activity within the NRE was mapped to a sequence that resembled the binding site for the ubiquitous factor Oct-1. These results indicated that the negative activity of the NRE was dependent on its interaction with other regulatory sites within the insulin gene. Thus, the NRE exhibited negative activity in transfected HIT cells when placed upstream of an insulin gene fragment (positions -261 to +112). However, its activity was modulated in a positive manner by inclusion of additional sequences from position -279 to -341. This region contains the CT3 box that binds the homeodomain protein IUF1 (insulin upstream factor 1). The NRE resembled a silencer, being at least partly independent of precise location and orientation, and being able to operate upon a variety of promoters. The role of the NRE is unclear, although it may be involved in restricting expression of the insulin gene to cells of the islets of Langerhans.