Alpha-fetoprotein (AFP) gene expression occurs in the yolk sac, fetal liver and gut, and in the adult liver during regeneration and tumorigenesis. Polymorphism at a single genetic locus, Afr-2 (formerly known as Rif) between inbred mouse strains C3H/He and C57B1/6, results in different levels of AFP expression during liver regeneration. We examined AFP, histone H3, and albumin gene expression during liver regeneration and found that the strain-specific variance in AFP gene expression could not be attributed to a difference in the numbers of dividing cells. Experiments with transgenic mice revealed sequences required for Afr-2 regulation included 172 bp between -1010 and -838 bp and 118 bp immediately upstream of the AFP transcriptional start site-the same regions required for induction during liver regeneration. This suggests that the Afr-2 phenotype may stem from an allelic difference in a gene regulating gene expression during liver regeneration.