The matrix metalloproteinase gelatinase A plays a central role in several critical physiologic processes, including angiogenesis, tumor invasion/metastasis, and chronic inflammation. We demonstrate that high level gelatinase A expression is mediated by a unique interaction of two developmentally regulated transcription factors, AP2 and YB-1, within a discrete 40-base pair enhancer element (RE-1) located in the 5'-flanking region of the gelatinase A gene. Electrophoretic mobility shift assay studies and immunoprecipitation experiments confirmed a direct interaction of AP2 with this binding sequence in the form of AP2.YB-1 heteromeric complexes. Binding of AP2.YB-1 complexes to the RE-1 sequence results in the formation of extended single-stranded DNA regions and may stabilize DNA conformational changes. Overexpression of YB-1 and AP2 proteins by gelatinase A synthesizing hepatoma HepG2 cells induced a synergistic increase in the RE-1-mediated transcription of nearly 160-fold. Thus, the transcription of gelatinase A is subject to a previously unrecognized interplay of double (AP2) and single-stranded (YB-1) DNA binding transcription factors to yield a highly regulated pattern of gene expression.