During endochondral bone formation, hypertrophic chondrocytes initiate synthesis of type X collagen. Previous studies have shown that regulation of this molecule is at the level of transcription, To further explore this regulation, we have studied a segment of the type X collagen gene extending from 562 base pairs (bp) upstream to 86 bp downstream of the transcriptional start site. We have studied this ''proximal promoter region'' by both structural analysis by DNase I in vivo footprint and functional analysis by transient transfections. In type X collagen expressing, hypertrophic chondrocytes, in vivo footprinting detected a fully protected TATA region flanked by hypersensitive sites but no other major protection, Type X collagen-negative cells (nonhypertrophic chondrocytes and tendon fibroblasts) showed major protection at a number of other sites, most notably an 8-bp region overlapping an AP2 site and a 9-bp region including the sequence CACACA. The importance of the proximal promoter region in restricting expression of type X collagen to hypertrophic chondro cytes was supported by transfection studies. A chloramphenicol acetyltransferase construct containing this region directed 5-10-fold higher chloramphenicol acetyltransferase expression in hypertrophic chondrocytes than in the other cell types. A 2.6-kilobase upstream fragment produced no additional effect. Thus, the proximal promoter region contains at least some regulatory elements for the cell-specific expression of type X collagen.