We report the cDNA cloning of SREBP-2, the second member of a family of basic-helix-loop-helix-leucine zipper (bHLH-Zip) transcription factors that recognize sterol regulatory element 1 (SRE-1). SRE-1, a conditional enhancer in the promoters for the low density lipoprotein receptor and 3-hydroxy-3-methylglutaryl-coenzyme A synthase genes, increases transcription in the absence of sterols and is inactivated when sterols accumulate. Human SREBP-2 contains 1141 amino acids and is 47% identical to human SREBP-1a, the first recognized member of this family. The resemblance includes an acidic NH2 terminus, a highly conserved bHLH-Zip motif (71% identical), and an unusually long extension of 740 amino acids on the COOH-terminal side of the bHLH-Zip region. SREBP-2 possesses one feature lacking in SREBP-1a--namely, a glutamine-rich region (27% glutamine over 121 residues). In vitro SREBP-2 bound SRE-1 with the same specificity as SREBP-1a. In vivo it mimicked SREBP-1a in activating transcription of reporter genes containing SRE-1. As with SREBP-1a, activation by SREBP-2 occurred in the absence and presence of sterols, abolishing regulation. Cotransfection of low amounts of pSREBP-1a and pSREBP-2 into human embryonic kidney 293 cells stimulated transcription of promoters containing SRE-1 in an additive fashion. At high levels transcription reached a maximum, and the effects were no longer additive. The reason for the existence of two SREBPs and the mechanism by which they are regulated by sterols remain to be determined.