Transforming growth factor (TGF-beta) binds several discrete membrane proteins. Of these, a type 1 receptor appears indispensable for signal transduction. Previous examination of TGF-beta receptor expression has been limited to changes in cell surface protein, and more recently, mRNA abundance. In order to learn more about TGF-beta function and receptor expression during osteogenesis, we have now cloned a 4 kilobase (kb) DNA fragment 5' proximal to the coding region of the rat TGF-beta type I receptor gene. Sequence analysis revealed multiple elements compatible with transcription initiation, including a properly positioned and oriented CCAAT box, six Sp1 binding sites (three defining GC boxes), and two strong AP2 binding sites within a 0.7 kb span directly upstream of the coding region. The 3' terminal 0.3 kb span comprises a GC-enriched (77%) so-called CpG island that, like other similarly organized promoters, lacks a TATA box. Primer extension and RNase protection studies with cRNAs from this area show multiple initiation sites within 220 bp 5' proximal to the initial methionine codon. Transient transfections using nested, deleted, and inverted promoter sequences demonstrated maximal reporter expression by a 1 kb fragment encompassing all of these elements. Truncation of the 1 kb fragment from the 5' and 3' ends indicated the need for several elements for peak promoter activity. These results, and transfections in fetal rat bone and dermal cells, suggest that this promoter contains elements that specify basal and conditional expression of the TGF-beta type I receptor in bone.