The alpha- and beta-subunit genes of hCG are coordinately regulated in the trophectoderm of the early embryo and placenta. Placenta-specific expression of the alpha-subunit gene is determined by a composite enhancer made of three clustered components: cAMP-responsive elements, a GATA site, and the trophoblast-specific element (TSE). We have investigated the basis of placenta-specific expression of the major hCG beta-subunit gene, hCG beta 5. Enhancement of expression localizes to the region from -305 to -279, whereas full cAMP regulation requires the region from -305 to -249. Four DNAse-I footprints are present, three of which can be competed by the TSE element from the alpha-subunit gene. Methylation interference establishes that binding to the element located in the key region for expression, from -301 to -275, requires contacts with a CCNNNGGG core sequence that matches the alpha-subunit gene TSE. Sequence-specific DNA affinity chromatography using the alpha-subunit gene TSE allows purification of TSE-binding protein. This purified protein binds specifically to the key element, -301 to -275, and to at least two additional TSE elements clustered in the regulatory region of the hCG beta 5 gene. We conclude that both the alpha- and beta-subunit genes of hCG require the placenta-specific factor TSE-binding protein for expression, providing a mechanism for their coordinate regulation in placental cells.