A method for preparation of transcriptionally active nuclear extracts from the ciliated protozoan Tetrahymena thermophila is described. Cells were lysed in the presence of gum arabic, and nuclei were further purified in the presence of Ficoll 400. Highly concentrated nuclear extracts were prepared by ultracentrifugation of nuclei in a buffer containing potassium glutamate and spermidine. These extracts supported accurate transcription initiation of T. thermophila class II and III genes. Using the histone H3-II gene as a template, we demonstrated that physiologically induced changes in transcriptional activity in vivo were reflected in the transcriptional activity of the nuclear extract in vitro. By electrophoretic mobility shift assays, five conserved sequence elements in the upstream region of the histone H3-II gene were shown specifically to bind proteins in extracts from exponentially growing as well as from starved cells, and by UV cross-linking we further characterized the specific binding of two proteins to an oligonucleotide containing a conserved CCAAT box motif. Transcription competition experiments showed that addition of this oligonucleotide decreased transcription significantly. Competition with oligonucleotides corresponding to the two proximal conserved sequence elements almost completely abolished transcription of the H3-II gene suggesting that binding of transacting factors to these elements is crucial for initiation of transcription.