The common -216G-->A and -480C-->T substitutions in the promoter region of the human hepatic lipase (LIPC) gene show high allelic association, and are correlated with decreased hepatic lipase activity and increased high-density lipoprotein cholesterol levels. To test the functionality of these substitutions, CAT-reporter assays were performed in HepG2 cells. LIPC (-650/+48) but not (-650/+61) promoter constructs showed transcriptional activity. LIPC (-650/+48) constructs with both -216A and -480T exhibited significantly lower promoter activity (-45%) than the wild-type form. Activities of -289/+48 constructs were not significantly affected by the -216G-->A substitution. The -480C/T site lies within a binding region for Upstream Stimulatory Factor (USF). Gel-shift assays showed that the binding affinity of USF protein for HL specific oligonucleotides was decreased four-fold by the -480C-->T substitution. However, promoter activity of the -650/+48 constructs was not significantly affected by the -480C-->T substitution alone. Co-transfection of HepG2 cells with USF(43) cDNA yielded a similar dose-dependent increase in activity of all -650/+48 constructs; the absolute difference in promoter activity increased but the relative difference between the variant promoter forms was maintained. Our studies demonstrate that the common LIPC promoter variation is functional, which explains the association of the -480T allele with a lower hepatic lipase activity in man.