Expression of the liver-specific alpha-1-antitrypsin (alpha-1AT) gene is extinguished in hepatoma/fibroblast hybrids. To define the mechanism of extinction, we identified DNA sequences involved in this process by transiently transfecting mutant alpha-1AT promoters into parental and hybrid cells. The wild-type alpha-1AT promoter (-554 to +44 bp) was highly expressed in rat hepatoma cells, but activity was 100-fold less in fibroblasts or cell hybrids. Mutations in this region failed to activate alpha-1AT expression in nonhepatic cells, but mutations in the binding site for liver factor B1 (LF-B1) reduced hepatic-specific expression > 100-fold. Furthermore, the hybrid cells failed to express LF-B1-binding activity and mRNA. This suggested that alpha-1AT extinction in hybrids might be an indirect, lack-of-activation phenotype mediated primarily through repression of LF-B1. To test this possibility, we stably transfected an LF-BI expression cassette into parental and hybrid cells and monitored expression of transfected and endogenous alpha-1AT genes. Surprisingly, although constitutive LF-B1 expression could activate alpha-1AT-CAT transgenes in these cells, it neither prevented nor reversed extinction of the chromosomal alpha-1AT genes. We conclude that although extinction of the LF-B1 trans-activator accompanies alpha-1AT extinction in cell hybrids, it does not play a causal role in this process.