Treatment of the hepatoma cell line, Hep3B, with gamma-interferon (IFN) enhanced expression of C1 inhibitor (C1INH) mRNA, primarily due to an enhanced transcription rate. Hep3B cells transfected with reporter constructs containing various regions of the C1INH gene between positions -1182 and +587, and stimulated with gamma-IFN, expressed increased levels of chloramphenicol acetyltransferase in the presence of the first intron and as few as 12 bases of the 5'-flanking region. However, a 66% reduction in the inducibility of the constructs was observed when the upstream region between -582 and -252 was eliminated. Successive deletions mapped the first intron IFN-responsive elements to a region between +368 and +410. The data indicate that both the upstream and the first intron sequences can independently enhance induction of C1INH gene expression. Examination of the immediate upstream sequence of the C1INH gene reveals the absence of a TATA box. The promoter of the C1INH gene was mapped to a region within 81 bases of the upstream sequence and the first exon. Further examination indicated two regions that were potentially important for promoter activity as follows: 1) a G-C-rich region from -81 to -49, and 2) an initiator element at -3 to +5. The results indicate that the upstream sequences including -81 to -49 and the H-DNA region between -48 and -17 are not necessary for promotor activity. The initiator element from -3 to +5 is sufficient and necessary for promoter function.