The human ADH1, ADH2, and ADH3 genes are closely related members of a gene family which are differentially expressed during liver development. To begin examining the mechanism of this tissue-specific and stage-specific expression, the 5'-flanking nucleotide (nt) sequences of the three genes were determined and the transcription start point (tsp) were identified. Sequences of all three genes indicated a high degree of homology (greater than 80% nt sequence identity) from the AUG translation start codon to about nt -780 relative to the tsp. Transient transfection assays of a set of plasmids containing various lengths of ADH 5'-flanking DNA fused to cat were performed in the HepG2 and Hep3B human hepatoma cell lines. The results indicated that the ADH2 promoter-proximal region was transcriptionally active in the absence of upstream sequences. To identify potential cis-acting elements in the ADH2 promoter-proximal region, a DNase I footprinting assay using a rat liver nuclear extract was used. Protection occurred in several locations including one, between nt -51 and -10, which shares homology with known binding sites for a previously identified rat-liver transcription factor called CCAAT/enhancer binding protein (C/EBP). Purified C/EBP was shown by footprint analysis to bind at two distinct sites in the ADH2 promoter located at nt -51 to -31 and -21 to -10. The TATA-box promoter element at nt -30 to -22 was not protected by C/EBP, but was partially protected by a factor in the rat liver nuclear extract. Thus, it is possible that the flanking C/EBP molecules may create a novel binding pocket for TFIID, the TATA-binding general transcription factor for RNA polymerase II. Alternatively, the C/EBP molecules may block access to the TATA box, and stimulate transcription of ADH2 by interacting with some component(s) other than TFIID.