The development and maintenance of a complex multicellular organism requires precisely regulated patterns of gene expression. This is accomplished, in part, by sequence-specific transcription factors that bind to cis-regulatory DNA elements in promoters and enhancers and modulate the rate of initiation. Aberrant transcription factor activity can lead to developmental abnormalities and oncogenesis. A comprehensive analysis of how these proteins function and are regulated is vital to understand development and disease. Our long term goal is to learn about these control mechanisms in the context of the highly regulated transcription factor AP-2. The mammalian enhancer-binding protein AP-2 interacts with important cis-regulatory control elements found in many cellular and viral genes. AP-2 provides a highly tractable system to analyze the regulation of transcription factor activity. First, AP-2 acts as a nuclear target for signal transduction by both the protein kinase A- and C-signalling pathways, which respond to cAMP and TPA respectively. Second, the expression of the AP-2 gene is activated during the retinoic acid-induced differentiation of human teratocarcinoma cells into neuronal derivatives. Third, the distribution of AP-2 transcripts is regulated in both a spatial and temporal manner during mouse embryogenesis. The majority of AP-2 expression occurs in developing neural crest cell lineages which are especially important for the formation of the peripheral nervous system. finally, the activity of the AP-2 protein is modulated by two viral proteins that contribute to carcinogenesis. The human hepatitis virus pX protein, implicated as a oncogenic factor in human hepatocarcinoma, can stimulate the activity of the AP-2 protein. In contrast, the SV40 large T antigen oncogene represses the activity of AP-2. Therefore, an understanding of the mechanisms by which SV40 T-antigen and HBV pX modify the function of AP-2 will help define the role of these viral transacting proteins in altering cellular gene expression during oncogenesis. In vivo and in vitro assay systems have been established to study the structure and function of the AP-2 protein. A series of mutant constructs have been generated that define the regions of the protein necessary for transcriptional activation, DNA binding and dimerization. These mutant proteins can now be used to determine how AP-2 is controlled by signal transduction and by viral trans-activators. In addition they provide reagents to probe the role of AP-2 in determining cell fate. Finally, the regulation of the AP-2 promoter during cellular development will be examined to dissect the mechanisms controlling differentiation in response to retinoic acid.