Sp1 nuclear levels have been shown to directly correlate with the proliferative state of the cell. We therefore studied changes in the abundance of Sp1 in a rat pituitary cell line GH(4) whose growth rate is regulated by epidermal growth factor (EGF). Nuclear extracts from GH, cells treated with 10 nM EGF for at least 16 h showed a 50% decrease in Sp1 binding to a GC-rich element present in the gastrin promoter. The decrease in binding correlated with a decrease in cell proliferation, a loss of nuclear Sp1 protein and a 50-60% decrease in Sp1-mediated transactivation through an Sp1 enhancer element in transfection assays. Okadaic acid, a phosphatase inhibitor, was synergistic with the effect of EGF on Sp1 protein levels suggesting that the loss of Sp1 was mediated by phosphorylation events. This result was confirmed by showing a 2-fold increase in orthophosphate-labeled Sp1 with EGF and okadaic acid, Cycloheximide prevented the expected loss of Sp1 mediated by EGF and okadaic acid suggesting that the synthesis of a protease may mediate these events. This hypothesis was tested directly by showing that the cysteine protease inhibitor leupeptin prevented Sp1 degradation. Using the PEST-FIND computer program, the computed PEST score for human and rat Sp1 is 10.4 and 13.7, respectively, indicating that Sp1 has a domain with a high concentration of proline, glutamic acid, serine, and threonine residues as reported for a number of proteins with inducible rates of degradation. Collectively, these results indicate that sustained stimulation of GH(4) cells by EGF initiates a cascade of phosphorylation events that promotes Sp1 proteolysis, decreased Sp1 nuclear levels and decreased cellular proliferation.