The major protein component of the cornified cell envelope barrier structure of the epidermis is loricrin, and it is expressed late during terminal differentiation in epidermal keratinocytes. We have previously shown that an AP1 site located in the proximal promoter region (position -55) is essential for human loricrin promoter activity (Rossi, A., Jang, S-I., Ceci, R., Steinert, P. M., and Markova, N. G. (1998) J. Invest. Dermatol. 110, 34-40). In this study we show that its regulation requires complex cooperative and competitive interactions between multiple transcription factors in keratinocytes located in different compartments of the epidermis. We show that as few as 154 base pairs of 5'-upstream sequences from the cap site can direct the keratinocyte-specific expression in cultured keratinocytes. Mutation and DNA-protein analyses show that Sp1, c-Jun, an unidentified regulator, and the co-activator p300/CREB-binding protein up-regulate whereas Sp3, CREB-1/CREMalpha/ATF-1, Jun B, and an AP2-like protein (termed the keratinocyte-specific repressor-1 (KSR-1)) suppress loricrin promoter activity. We show that CREB protein can compete with c-Jun for the AP1 site and repress loricrin promoter activity. We show here that the protein kinase A pathway can activate loricrin expression by manipulation of the Sp1, Sp3, and KSR-1 levels in the nucleus. Thus, in undifferentiated cells, loricrin expression is suppressed by Jun B, Sp3, and KSR-1 proteins. But in advanced differentiated cells, levels of Sp3, KSR-1, and CREB proteins are lower; the unidentified regulator protein can bind; Sp1 and c-Jun are increased; and then p300/CBP is recruited. Together, these events allow loricrin transcription to proceed. Indeed, the synergistic effects of the Sp1, c-Jun, and p300 factors indicate that p300/CBP might act as bridge to form an active transcription complex.