The transcriptional activator protein-2 (AP-2) has been suggested to participate in keratinocyte gene regulation. Cystatin A, a cysteine proteinase inhibitor, is one of the cornified cell envelope constituents and is expressed in the upper epidermis. We report AP-2-dependent transcriptional regulation of cystatin A gene expression of keratinocytes. At least three isoforms of AP-2 (AP-2 alpha, beta, gamma) have been described. Transfection of AP-2 alpha, beta and gamma expression vectors into cultured normal human keratinocytes (NHK) resulted in increased cystatin A expression in both mRNA and protein levels. Among the three isoforms AP-2 gamma was most potent in inducing cystatin A expression. In contrast, transfection of antisense oriented AP-2 gamma expression vector decreased basal AP-2 expression, accompanied by decreased cystatin A mRNA The fragment, +77 to -478 of 5'-flanking region of human cystatin A gene, was subcloned into chloramphenicol acetyltransferase (CAT) reporter vector (p478CAT). Cotransfection of p478CAT vector with AP-2 alpha, beta, and gamma expression vectors resulted in three-, three-, and sixfold increase in the CAT activity, respectively. Transfection of the deleted construct (p478 Delta AP-2CAT, devoid of AP-2-like binding site (-75 to -84)) decreased CAT activity by one-third compared to p478CAT promoter activity. Cotransfection of p478 Delta AP-2CAT with AP-2 alpha, beta, and gamma expression vectors had no effect on the decreased promoter activity. Immunohistochemical analysis of human skin showed that AP-2 gamma is exclusively expressed in the nuclei of basal cell layer. AP-2 gamma is expressed in the nuclei of basal, spinous, and granular cell layers. AP-2 beta expression was not observed in the epidermis. Gel mobility shift assay revealed that the AP-2 gamma protein specifically binds to oligonucleotides containing AP-a-like binding site of cystatin A gene. These results indicate that AP-2 gamma regulates the cystatin A gene expression of epidermal keratinocytes at the transcriptional level.