The increase in acetylcholinesterase expression during muscle differentiation from myoblasts to myotubes was shown previously to reflect primarily a greater stability of the messenger RNA (mRNA). Here, we investigate the regulation of the acetylcholinesterase gene during early determination of the muscle phenotype. (i) We employ myogenic transcription factors to transform non-muscle cells into myoblasts in order to assess the role of the myogenic transcription factors in this regulation. (ii) We analyze the Ache promoter region by deletion analysis, point mutagenesis, and gel mobility shift assays. The myogenic transcription factors do not accelerate transcription of the Ache gene in spite of the presence of E-boxes at -335 base pairs from the start of transcription and in the first intron, and they are not able to trigger stabilization of the Ache mRNA when constitutively expressed in 10T1/2 fibroblasts. A GC-rich region (at -105 to -59 base pairs from the start of transcription) containing overlapping binding sites for the transcription factors Sp1 and Egr-1 is essential for promoter activity. Mutation of the Sp1 sites dramatically reduces the promoter activity while mutation of the Egr-1 sites has little effect. Sp1 and Egr-1 compete for binding to overlapping sites and an increase in Egr-1 decreases the expression of the Ache gene.