PLAG1, a novel developmentally regulated C2H2 zinc finger gene, is consistently rearranged and overexpressed in pleomorphic adenomas of the salivary glands with 8q12 translocations. In this report, we show that PLAG1 is a nuclear protein that binds DNA in a specific manner. The consensus PLAG1 binding site is a bipartite element containing a core sequence, GRGGC, and a G-cluster, RGGK, separated by seven random nucleotides. DNA binding is mediated mainly via three of the seven zinc fingers, with fingers 6 and 7 interacting with the core and finger 3 with the G-cluster. In transient transactivation assays, PLAG1 specifically activates transcription from its consensus DNA binding site, indicating that PLAG1 is a genuine transcription factor. Potential PLAG1 binding sites were found in the promoter 3 of the human insulin-like growth factor II (IGF-II) gene. We show that PLAG1 binds IGF-II promoter 3 and stimulates its activity. Moreover, IGF-II transcripts derived from the P3 promoter are highly expressed in salivary gland adenomas overexpressing PLAG1. In contrast, they are not detectable in adenomas without abnormal PLAG1 expression nor in normal salivary gland tissue. This indicates a perfect correlation between PLAG1 and IGF-II expression. All of these results strongly suggest that IGF-II is one of the PLAG1 target genes, providing us with the first clue for understanding the role of PLAG1 in salivary gland tumor development.