The phorbol ester 12-O-tetradecanoylphorbol-13-acetate (TPA) is a potent inducer of keratinocyte differentiation and of involucrin gene expression. In the present study we show that a CCAAT/enhancer-binding protein (C/EBP) site in the proximal regulatory region is required for the phorbol ester response. Mutation of the C/EBP site results in the loss of basal and TPA-responsive activity. Gel mobility supershift analysis shows that C/EBPalpha binding to this site is increased by TPA treatment. Moreover, cotransfection of the human involucrin reporter plasmid with C/EBPalpha increases promoter activity to an extent comparable with TPA treatment. Mutation of the C/EBP-binding site eliminates these responses. Transfection experiments using GADD153 to create C/EBP-null conditions confirm that C/EBP factors are absolutely required for promoter activity and TPA responsiveness. C/EBPbeta and C/EBPdelta inhibit both TPA- and C/EBPalpha-dependent promoter activation, indicating functional differences among C/EBP family members. These results suggest that C/EBP transcription factor activity is necessary for basal promoter activity and TPA response of the involucrin gene.