The gene encoding surfactant protein (SP) A, a developmentally regulated pulmonary surfactant-associated protein, is expressed in a lung-specific manner, primarily in pulmonary type II cells. SP-A gene transcription in the rabbit fetal lung is increased by cAMP. To delineate the genomic regions involved in regulation of SP-A gene expression, lines of transgenic mice carrying fusion genes composed of various amounts of 5'-flanking DNA from the rabbit SP-A gene linked to the human growth hormone structural gene as a reporter were established. We found that as little as 378 bp of 5'-flanking DNA was sufficient to direct appropriate lung cell-selective and developmental regulation of transgene expression. The same region was also sufficient to mediate cAMP induction of transgene expression. Mutagenesis or deletion of either of two DNA elements, proximal binding element and a cAMP response element-like sequence, previously found to be crucial for cAMP induction of SP-A promoter activity in transfected type II cells, did not affect lung-selective or temporal regulation of expression of the transgene; however, overall levels of fusion gene expression were reduced compared with those of wild-type transgenes.