The alpha-fetoprotein (AFP) gene is expressed in fetal liver and in adult liver undergoing regeneration or tumorigenesis. It has been shown previously that three distal enhancers, a proximal promoter, and a dominant negative postnatal repressor element are required for the tissue-specific and developmental regulation of AFP gene expression. Using transgenic mice, we have determined the sequence requirements for AFP gene induction during liver regeneration. Two DNA sequences were found in all transgenes appropriately regulated in response to liver regeneration: a distal sequence between 1010 and 838 bp upstream of the structural gene and a proximal sequence within 118 bp of the transcriptional initiation site. In situ hybridization analysis showed that transgene expression during liver regeneration was first found in all hepatocytes and then localized to perinecrotic hepatocytes surrounding the central vein. This pattern of expression is reminiscent of that observed after birth for the transgenes, suggesting that repression of AFP gene expression after birth and liver injury may be regulated by similar mechanisms.