Growing evidence that epithelial CD98 plays an important role in intestinal inflammation focused our interest to investigate the transcriptional regulation of CD98. Our mouse-based in vivo and in vitro experiments revealed that epithelial colonic CD98 mRNA expression was transcriptionally increased in intestinal inflammation. We then isolated and characterized a 5'-flanking fragment containing the promoter region required for CD98 gene transcription. Primer extension and rapid amplification of 5'-cDNA ends were used to map a transcriptional initiation site 129 bp upstream from the translational start codon (ATG). Direct sequencing of the 5'-flanking region revealed the presence of four GC-rich stimulating protein (Sp)1 binding domains, one NF-kappaB binding domain, and no TATA box. Binding of Sp1 [Sp1(-874), SP1(-386), Sp1(-187), and Sp1(-177)] and NF-kappaB [NF-kappaB(-213)] to the promoter was confirmed by EMSA and supershift assays. Furthermore, chromatin immunoprecipitation experiments showed the in vivo DNA-Sp1 and DNA-NF-kappaB interactions under basal and IFN-gamma-stimulated conditions. Reporter genes driven by serially truncated and site-mutated CD98 promoters were used to examine basal and IFN-gamma-responsive transcription in transiently transfected Caco2-BBE cells. Our results revealed that Sp1(-187), Sp1(-177), and the NF-kappaB binding site were essential for basal and IFN-gamma-stimulated CD98 promoter activities, whereas Sp1(-874) and Sp1(-386) were not. The results from additional site-mutated CD98 promoters suggested that Sp1(-187), Sp1(-177), and the NF-kappaB site may cooperate in mediating basal and IFN-gamma-stimulated CD98 promoter activities. Finally, we demonstrated that a reduction of Sp1 or NF-kappaB expression reduced CD98 protein expression in unstimulated and IFN-gamma-stimulated Caco2-BBE cells. Collectively, these findings indicate that the Sp1 and NF-kappaB transcription factors are likely to play a significant role in IFN-gamma-mediated transcriptional regulation of CD98 in the intestinal epithelium, providing new insights into the regulation of CD98 expression in intestinal inflammation.