Although the liver is the major source of circulating insulin-like growth factor-I (IGF-I), relatively little is known about the regulation of IGF-I gene transcription in this tissue. Since transcripts are initiated largely in exon 1, we established an in vitro transcription system to evaluate activation of transcription via the major exon 1 initiation site. Transcription of a G-free cassette reporter was directed by rat IGF-I genomic fragments, and the adenovirus major late promoter was used as an internal control. Tissue specificity was demonstrated by a 60-90% decrease in transcripts with spleen extracts as compared with liver. 54 base pairs (bp) of upstream sequence were sufficient to direct IGF-I gene transcription, and activity increased 5-fold with 300 bp of upstream sequence. DNase I footprinting revealed four protected regions between -300 and -60 bp; binding was confirmed by gel shift analysis, and tissue specificity was demonstrated by reduced shifts with spleen extracts. The necessity of transcription factor binding to such sites was established by competition analysis, which revealed a specific decrease in IGF-I transcription in the presence of a competing fragment. Use of this in vitro transcription system should permit analysis of the function of individual transcription factors involved in regulation of IGF-I gene expression.