The mammalian CYP2E1 gene encodes a cytochrome P450 enzyme that is markedly increased soon after birth. In vitro evidence suggests that the rat CYP2E1 gene is positively regulated by the transcription factor HNF-1 or a protein displaying DNA-binding properties similar to HNF-1. In contrast to newborn wild-type mice and mice heterozygous for a 1.2-centiMorgan deletion on chromosome 7, newborn mice homozygous for this deletion do not show significant expression of the Cyp2e-1 and Hnf-1 genes. However, the Cyp2e-1 and Hnf-1 structural genes are not in the chromosome 7 segment deleted in these mice. Although Cyp2e-1 maps to chromosome 7, it is distal to this deletion; Hnf-1 maps to chromosome 5. These data suggest that the deleted region of chromosome 7 contains a gene encoding a trans-acting factor which is upstream (epistatic) in the regulatory cascade that includes Hnf-1 gene expression.