We have produced transgenic mice that express the prokaryotic marker protein chloramphenicol acetyltransferase under the control of regulatory sequences derived from the rat atrial natriuretic factor gene. The transgene, which contains 2.4 kilobases of the rat atrial natriuretic factor gene regulatory region, was found to direct 4000-fold more chloramphenicol acetyltransferase expression in adult atria than in ventricles. Low-level activity was also detected in the hypothalamus, demonstrating that these sequences contain the signals necessary for cardiac and central nervous system expression of the hormone atrial natriuretic factor. Developmental analyses showed early, high-level transgene expression in fetal atrial and ventricular tissues but marked reduction of ventricular transgene expression following birth. Further, the developmental expression patterns of the endogenous murine atrial natriuretic factor gene and rat transgene were found to be quite distinct. Although both the rat and mouse atrial natriuretic factor genes are activated early in embryogenesis, perinatal ventricular expression appears to differ in these two rodent species. The transgene is expressed in a pattern analogous to the neonatal rat rather than the endogenous murine gene. These studies demonstrate that the cis-acting signals required for correct tissue specificity and developmental regulation of the rat atrial natriuretic factor gene are encoded in this 2.4-kilobase fragment and that these sequences act in a dominant fashion.