DARPP-32 (dopamine and adenosine 3', 5'-cyclic monophosphate cAMP-regulated phosphoprotein, 32 kDa) is a striatal-enriched protein that mediates signaling by dopamine and other first messengers in the medium spiny neurons. The transcriptional mechanisms that regulate striatal DARPP-32 expression remain enigmatic and are a subject of much interest in the efforts to induce a striatal phenotype in stem cells. We report the identification and characterization of a conserved region, also known as H10, in intron IV of the gene that codes for DARPP-32 (Ppp1r1b). This DNA sequence forms multiunit complexes with nuclear proteins from adult and embryonic striata of mice and rats. Purification of proteins from these complexes identified early growth response-1 (Egr-1). The interaction between Egr-1 and H10 was confirmed in vitro and in vivo by super-shift and chromatin immunoprecipitation assays, respectively. Importantly, brain-derived neurotrophic factor (BDNF), a known inducer of DARPP-32 and Egr-1 expression, enhanced Egr-1 binding to H10 in vitro. Moreover, overexpression of Egr-1 in primary striatal neurons induced the expression of DARPP-32, whereas a dominant-negative Egr-1 blocked DARPP-32 induction by BDNF. Together, this study identifies Egr-1 as a transcriptional activator of the Ppp1r1b gene and provides insight into the molecular mechanisms that regulate medium spiny neuron maturation.