The costimulatory molecule B7.1 provides a second signal critical for T cell activation. The distribution of this integral membrane protein is restricted to certain tissues where its level of expression is modulated by multiple exogenous stimuli. To identify the molecular basis for specificity and inducibility, the chromatin configuration of the human B7.1 gene was examined in intact nuclei from various cell types. The identification of a tissue-specific deoxyribonuclease I hypersensitive site approximately 3kb upstream of the transcription start site led to the characterization of a cell type-specific enhancer region. This 183-bp region was both cell type specific and responsive to two distinct stimuli, lipopolysaccharide and dibutyryl cAMP, known to regulate B7.1 expression. Deletional and site-directed mutagenesis revealed the presence of multiple functionally critical cis elements within this region, one of which was a nuclear factor (NF)-kappaB consensus sequence. In B7.1-positive B cells, this element bound several members of the NF-kappaB family, transcription factors already implicated in signal transduction pathways relevant to B7.1 expression. This is the first description, to our knowledge, of regulatory elements that control expression of a gene encoding a B7 costimulatory molecule.