Increasing evidence suggests that the cytokine transforming growth factor-beta (TGF-beta) inhibits the development of atherosclerosis. The lipoprotein lipase (LPL) enzyme expressed by macrophages has been implicated in the pathogenesis of atherosclerosis by stimulating the uptake of lipoprotein particles. Unfortunately, the action of TGF-beta on the expression of LPL in macrophages remains largely unclear. We show that TGF-beta inhibits LPL gene expression at the transcriptional level. Transient transfection assays reveal that the -31/+187 sequence contains the minimal TGF-beta-responsive elements. Electrophoretic mobility shift assays show that Sp1 and Sp3 interact with two regions in the -31/+187 sequence. Mutations of these Sp1/Sp3 sites abolish the TGF-beta-mediated suppression whereas multimers of the sequence impart the response to a heterologous promoter. TGF-beta has no effect on the binding or steady-state polypeptide levels of Sp1 and Sp3. These results, therefore, suggest a novel mechanism for the TGF-beta-mediated repression of LPL gene transcription that involves regulation of the action of Sp1 and Sp3.