Tyrosinase is a rate-limiting enzyme in melanin biosynthesis and is specifically expressed in differentiated melanocytes. We have identified the enhancer element in the 5'-flanking region of the human tyrosinase gene that is responsible for its pigment cell-specific transcription and have termed it tyrosinase distal element (TDE) (positions -1861 to -1842). Transient expression assays showed that TDE confers efficient expression of a firefly luciferase reporter gene linked to the tyrosinase gene promoter in MeWo pigmented melanoma cells but not in HeLa cells, which do not express tyrosinase. TDE was specifically bound by nuclear proteins of MeWo and HeLa cells, the binding properties of which were indistinguishable in gel mobility shift assays. TDE contains the CATGTG motif in its center, and mutation analysis indicates that the CA dinucleotides of this motif are crucial for protein binding and pigment cell-specific enhancer function. The CATGTG motif is consistent with the consensus sequence recognized by a large family of transcription factors with a basic helix-loop-helix structure, which prompted us to examine the possible involvement of a ubiquitous transcription factor, USF, and a novel factor, microphthalmia-associated transcription factor (MITF), recently cloned as the human homolog of the mouse microphthalmia (mi) gene product. The mi phenotype is associated with a mutant mi locus and characterized by small eyes and loss of melanin pigments. Both USF and MITF are predicted to contain a basic helix-loop-helix structure and a leucine zipper structure. We provide evidence that USF binds to TDE, whereas we were unable to detect the DNA-binding activity of MITF. Transient coexpression assays showed that MITF specifically transactivates the promoter activity of the tyrosinase gene through the CATGTG motif of TDE but not the promoter of the ubiquitously expressed heme oxygenase gene, while USF is able to activate both promoters. These results indicate that MITF is a cell-type-specific factor that is capable of activating transcription of the tyrosinase gene.