Previous studies have shown that transforming growth factor-beta (TGF-beta) and tumor necrosis factor-alpha (TNF-alpha) modulate type I collagen gene expression in fibroblasts. To fine-map the corresponding response elements in the human alpha 2(I) collagen (COL1A2) promoter, we have generated a series of 5' deletion promoter/ chloramphenicol acetyltransferase (CAT) reporter gene constructs, Transient cell transfection assays using human dermal fibroblasts and stable transfection experiments using NIH 3T3 fibroblasts identified the region located between residues -265 and -241, as critical for TGF-beta response, Specifically, we demonstrate that this 25-base pair region mediates the up-regulatory effect of TGF-beta on COL1A2 promoter activity and allows antagonistic activity of TNF-alpha on the TGF-beta effect. Gel mobility shift assays indicate that nuclear factor binding to this 25-base pair region of COL1A2 promoter is competed by AP-1, but not NF-1 or NF-kappa B, oligonucleotides. Transient cell transfection experiments with plasmid constructs in which the potential AP-1-binding site located within this short region of promoter was modified by site-directed mutagenesis indicated that this element plays a significant role in the basal activity of the promoter. Furthermore, this sequence is essential for TGF-beta response and does not require the presence of the three Sp-1-binding sites located further upstream, between nucleotides -273 and -304. In addition, overexpression of c-jun in co-transfection experiments with COL1A2 promoter/CAT constructs blocks the TGF-beta response, further implicating AP-1 in the regulation of COL1A2 gene expression. Our results clarify the molecular mechanisms involved in the regulation of type I collagen gene expression and further emphasize the importance of AP-1 in mediating some of the TGF-beta effects on gene transcription.