1. A tissue-specific transcriptional enhancer has been identified in the first intron of the mouse alpha 2 (I) collagen gene. 2. A functional analysis of deletions in the promoter of the mouse alpha 2 (I) collagen gene indicates there are at least two different segments upstream of the start of transcription that are important for optimal expression of this gene. 3. Transgenic mice were generated in which an alpha 2 (I) collagen promoter-chloramphenicol acetylase chimeric gene has been stably introduced in the germline. These new mouse strains show a tissue specific pattern of expression for the chimeric gene that coincides with that of the endogenous type I collagen genes. 4. Several factors present in nuclear extracts of NIH 3T3 cells have been identified, which bind to defined segments of the alpha 2 (I) collagen promoter. A factor which binds to the CCAAT sequence has been extensively purified. Evidence has been obtained that the factor consists of two components. 5. The hormone tumor growth factor beta stimulates transcription from the alpha 2 (I) and alpha 1 (III) collagen promoters in fibroblasts and osteosarcoma cells.