CD14, a monocyte/macrophage receptor for the complex of LPS and LPS binding protein, is a differentiation marker for the monocyte/macrophage lineage. We have analyzed the regulation of CD14 expression during 1 alpha,25-dihydroxyvitamin D3 (VitD3)-induced monocytic differentiation. Using FACS, Northern blotting, and nuclear run-on analyses, we demonstrate that the up-regulation of CD14 expression during monocytic cell maturation is regulated mainly at the level of gene transcription, and that new protein synthesis is required for CD14 induction. We have recently cloned the CD14 5' upstream sequence and demonstrated its tissue-specific promoter activity. Using stable transfection of the monocytoid U937 cell line with a series of deletion mutants of the CD14 5' upstream sequence coupled to a reporter gene construct, we show that bp -128 to -70 is the critical region for the induction of CD14 expression. This region contains two binding sites for the Sp1 transcription factor. A 3-bp mutation at the distal Sp1-binding site not only eliminates Sp1 interaction, but also abolishes most of the VitD3 induction of CD14 expression. Electrophoretic mobility shift analysis does not detect a direct interaction of the CD14 distal Sp1-binding site with the vitamin D3 receptor and its partner, the retinoid X receptor. These data demonstrate that VitD3 induces CD14 indirectly through some intermediary factor, and suggest a critical role for Sp1 in this process.