Expression of the parathyroid hormone-related protein (PTHrP), a protein that plays a primary role in the development of the humoral hypercalcemia of malignancy, is regulated by two distinct promoters, P1 and P2. PTHrP is overexpressed in lymphocytes from adult T-cell leukemia patients. We now demonstrate that in the human T-cell lymphotropic virus type I-transformed cell line MT-2, RNA synthesis is initiated primarily at the P2 promoter. Furthermore, in cotransfection experiments, Tax1 transactivates the P2 promoter 10- to 12-fold. By using deletion and site-specific point mutations, we have identified a promoter-proximal sequence (positions -72 to -40) which is important for Tax1 transactivation. The PTHrP promoter-proximal element contains two potential overlapping Ets1 binding sites, EBS I and EBS II. Gel shift analysis demonstrated that Ets1 binds specifically to both EBS I and EBS II. Mutation of the consensus GGAA core motif in EBS I abolished binding and Tax1 transactivation in Jurkat lymphocytes. In Ets1-deficient cells, cotransfection of Tax, and Ets1 expression plasmids stimulates PTHrP promoter activity. In the absence of Ets1, minimal transactivation of the PTHrP promoter is observed. These data suggest that Ets1 binds to EBS I and cooperates with Tax, to transactivate the PTHrP P2 promoter.