The molecular mechanism underlying the renal expression localization of the thiazide-sensitive Na-Cl cotransporter (TSC) gene was studied. The TSC gene was localized to chromosome 19p12-14. In cultured cells, tissue-specific transcription activity of the 5'-flanking region of the rat rTSC gene (5'FL/rTSC) was demonstrated, and the major promoter region was located between position -580 and -141. To further examine the tissue-specific transcription, transgenic rats harboring the 5'FL/rTSC fused upstream of the LacZ gene were generated. Immunohistochemical analysis clearly showed that LacZ gene expression was co-localized to distal convoluted tubules (DCT) with TSC, indicating that the 5'FL/rTSC regulates the renal tubule-specific TSC expression. Because a transcription factor, HFH-3 (hepatocyte nuclear factor-3/folk head homologue-3), had also been localized to DCT, a possible role of the putative cis-acting element (HFH-3/rTSC, -400/-387 position) for HFH-3 binding in the tissue-specific transcription was examined. Deletion and mutation analyses suggested that transcription of the HFH-3/rTSC was actually responsive to HFH-3, and electrophoretic mobility shift assay showed a direct binding of in vitro synthesized HFH-3 to the HFH-3/rTSC. In conclusion, the rTSC gene is localized to rat chromosome 19p12--24. The transcription regulatory region of the TSC gene confers DCT-specific gene expression. DCT-specific transcription factor HFH-3 may be involved in the renal tubule-specific transcription of TSC gene.