Surfactant protein B (SP-B) is essential for maintenance of biophysical properties and physiological function of pulmonary surfactant. SP-B mRNA expression is restricted to alveolar type II epithelial cells and bronchiolar epithelial cells (Clara cells) of adult lung. We previously (Margana, R. K., and Boggaram, V. (1996) Am. J. Physiol. 270, L601-L612) found that a minimal promoter region (-236 to +39) of rabbit SP-B gene is sufficient for high level expression of chloramphenicol acetyltransferase reporter gene in NCI-H441 cells, a cell line with characteristics of Clara cells. In the present study we used mutational analysis, electrophoretic mobility shift assays, and DNase I footprinting to identify cis-DNA regulatory elements and trans-acting protein factors required for lung cell-specific expression of SP-B gene. We found that in addition to thyroid transcription factor 1 (TTF-1) and hepatocyte nuclear factor 3 alpha (HNF-3 alpha) binding sites, two spatially separate DNA sequences that bind Spl and Sp3 factors are necessary for the maintenance of SP-B promoter activity. Mutation of any one of the transcription factor binding sites caused a significant reduction in SP-B promoter activity suggesting that Sp1, Sp3, and TTF-1 and HNF-3 alpha interact cooperatively with SP-B promoter to activate gene transcription.