P-glycoprotein, the product of the MDR1 gene (multidrug resistance gene 1), is an energy-dependent efflux pump associated with treatment failure in some hematopoietic malignancies. Its expression is regulated during normal hematopoietic differentiation, although its function in normal hematopoietic cells is unknown. To identify cellular factors that regulate the expression of MDR1 in hematopoietic cells, we characterized the cis- and trans-acting factors mediating 12-O-tetradecanoylphorbol-13-acetate (TPA) activation of the MDR1 promoter in K562 cells. Transient-transfection assays demonstrated that an MDR1 promoter construct containing nucleotides -69 to +20 conferred a TPA response equal to that of a construct containing nucleotides -434 to +105. TPA induced EGR1 binding to the -69/+20 promoter sequences over a time course which correlated with increased MDR1 promoter activity and increased steady-state MDR1 RNA levels. The -69/+20 promoter region contains an overlapping SP1/EGR site. The TPA-responsive element was localized to the overlapping SP1/EGR site by using a synthetic reporter construct. A mutation in this site that inhibited EGR protein binding blocked the -69/+20 MDR1 promoter response to TPA. The expression of a dominant negative EGR protein also blocked the TPA response of the -69/+20 promoter construct. Finally, the expression of EGR1 was sufficient to activate a construct containing tandem MDR1 promoter SP1/EGR sites. These data suggest a role for EGR1 in modulating MDR1 promoter activity in hematopoietic cells.