The immediate early gene transcription factor Egr-1 increases luciferase reporter gene activity 3-4-fold when a rat phenylethanolamine N-methyltransferase (PNMT) promoter-luciferase construct and an Egr-1 expression construct are cotransfected into transformed PC12 cells (RS1). Egr-1 also stimulates endogenous PNMT mRNA expression in the RS1 cells. Furthermore, when transfected RS1 cells are treated with dexamethasone, both luciferase and endogenous PNMT mRNA rise an additional 2-fold although dexamethasone does not independently activate transcription from the PNMT promoter. While both Egr-1 sites (-45 and -165 base pairs) in the PNMT promoter appear necessary for maximum luciferase reporter gene expression, the -165 site appears to be the more important for mediating the Egr-1 response. When the upstream site is deleted or either or both sites are mutated in PNMT-reporter gene constructs, Egr-1-induced luciferase activity from the PNMT promoter is significantly reduced. In addition, the incremental activation by dexamethasone is lost when sequences containing the glucocorticoid response element are deleted or when the Egr-1 sites are mutated. In the transfected RS1 cells, a rise in nuclear Egr-1 protein accompanies the rise in endogenous PNMT mRNA. Similarly, reserpine-treated rats (10 mg/kg, intraperitoneally), which show an 8-fold elevation in adrenal PNMT mRNA at 6 h postdrug administration, also show a marked rise in Egr-1 protein in adrenal medullary cell nuclei. These studies provide the first direct evidence that a transcription factor, Egr-1, can activate PNMT gene expression and identify PNMT as a novel target gene for Egr-1. Finally, the incremental enhancement of the Egr-1 response by glucocorticoids suggests a potential interaction between Egr-1 and another transcription factor, the glucocorticoid receptor.