The human complement protein Factor B is encoded by a single gene in the major histocompatibility complex and is closely linked to the gene encoding the second component of complement C2. DNA sequencing, S1 mapping, and primer extension experiments have established that the transcription initiation site of the Factor B gene lies only 421 bp from the poly(A) site of the C2 gene. Deletion analysis of the Factor B 5'-flanking region has suggested the presence of cis-acting DNA elements that are essential for the cell-specific expression of the Factor B gene. These sequences extend into the 3' region of the C2 gene. We have defined an enhancer element in the 5'-flanking region in addition to the promoter element. Our results suggest that the cell-specific expression of the Factor B gene is dependent upon the combinatorial effect of both the promoter and the enhancer elements.