The MMTV retrovirus is able to activate cellular oncogenes (so-called int loci) by insertion in the vicinity of these genes. This insertion is one of the key events leading to transformation of mammary epithelial cells. The mammary cell specificity of MMTV oncogenesis lies, in part, in tissue-specific expression of the MMTV promoter. Utilizing a recently developed cell line series (RAC cells) that retains many epithelial cell features in culture, we have discovered two regulatory elements in the viral regulatory sequences that are responsible for cell-specific viral transcription, and presumably also for tissue-specific oncogene activation. One of these elements, located at the 5' end of the LTR, acts as a cell-specific, positive enhancer region, and has been shown to contain binding sequences for at least two proteins, mp5 and mp4, both of which also appear to be limited in distribution to mammary cells. A second element, located internal to the LTR, acts as a negative transcription regulator, and also is restricted in its activity to a subset of mammary cells. Two factors that bind to this element and are tissue limited in distribution have been preliminarily characterized. Both the positive and negative factors correspond to similar activities present in human cells, suggesting this regulatory system is active in man. These observations suggest that MMTV protooncogene activation is mediated by a combination of positive and negatively-acting tissue-specific elements.