The molecular basis for adipose-specific gene expression is not known. To approach the problem of adipocyte gene expression, we have analyzed in detail the capacity of the 5'-flanking region of the adipocyte P2 (aP2) gene to direct cell-type specific gene expression. Although the proximal promoter containing AP-1 and C/EBP binding sites is capable of directing differentiation-dependent gene expression in cultured adipocytes, these constructs are essentially inactive in the tissues of transgenic mice. We found that -5.4 kb of the 5'-flanking region were required to direct heterologous gene (chloramphenicol acetyl transferase; CAT) expression to the adipose tissue of transgenic mice. By deletion analysis, we identified a 520 bp enhancer at -5.4 kb of the aP2 gene. We show that this enhancer can direct high levels of gene expression specifically to the adipose tissue of transgenic mice. This enhancer also functions in a differentiation-dependent manner in cultured adipocytes and cannot be transactivated in preadipocytes by C/EBP. Molecular analysis indicates that several cis- and trans- acting acting elements, though not C/EBP, contribute to the specificity and potency of this enhancer.