The murine gene for adipocyte P2 encodes an adipocyte-specific member of the family of intracellular lipid binding proteins. The region upstream from the start of transcription of this gene has been found to contain binding sites for the transcription factors c-jun/c-fos and C/EBP (CCAAT/enhancer binding protein) and several short sequence elements found in other adipocyte gene promoters, termed fat-specific elements. To identify DNA sequences that were responsible for the high level of transcription of the gene for adipocyte P2 in vivo, we made a series of transgenic mice containing 168 base pairs (bp), 247 bp, 1.7 kilobases (kb), and 5.4 kb of 5' flanking sequence linked to the bacterial gene chloramphenicol acetyltransferase. Although plasmids containing only 168 bp of 5' sequence including the C/EBP and AP-1 (activation protein 1) binding sites were expressed well in cultured adipocytes, high levels of chloramphenicol acetyltransferase activity in the adipose tissue of transgenic mice were not observed until the 5' flanking region was extended to kb -54. An enhancer mapping between kb -4.9 and kb -5.4 upstream from the start of transcription was identified by transfection of further deletions into cultured adipocytes. This enhancer, when linked to a bp -63 promoter fragment from the gene for adipocyte P2, directed very high level chloramphenicol acetyltransferase expression specifically to adipose tissue in transgenic mice. These results identify a functional adipose-specific enhancer and indicate that it is the major determinant of tissue specificity of the gene for adipocyte P2. These results also demonstrate that the proximal-promoter binding sites for AP-1 and C/EBP are not sufficient or necessary to give adipose-tissue-specific expression in vivo, though they may play an important role in the response of this promoter to glucocorticoids.