The 5' flanking region of the mouse N-ras gene was investigated to determine the elements governing transcriptional activity of the gene. The promoter did not contain typical TATA or CCAAT boxes, and according to primer extension and RNase protection analyses, transcription started at several sites. These assays also confirmed the short nucleotide distance interposed between the N-ras transcription unit and the previously described upstream unr gene. Chromatin studies performed by digestion of nuclei with DNase I revealed the presence of four hypersensitive sites: a, b, c, and d. Deletion mutagenesis of the 5' flanking region revealed sequences responsible for both promotion and inhibition of transcription. These sequences resided within 230 bp upstream of the transcription initiation site. Hypersensitive site b colocalized with the 76-bp segment with promoter activity. The negative regulatory element at position -180 colocalized with hypersensitive site a, was active on the N-ras promoter in stable as well as transient assays, and down-regulated the heterologous herpes simplex virus thymidine kinase promoter. Footprint analysis and in vivo transfection-competition experiments indicated that a trans-acting factor is responsible for the negative effect on transcription. The interaction between the cis-acting negative regulatory element and the promoter region may play a role in the tissue- and developmental-stage-specific patterns of expression of the N-ras gene.