Transforming growth factor-beta 1 (TGF-beta) is a strong and rapid inducer of several genes coding for extracellular matrix components, such as type I collagen. We report here that TGF-beta stimulates transcription of the human alpha 2(I) collagen gene (COL1A2) promoter by increasing the affinity of an Sp1-containing protein complex for its cognate DNA-binding site. Cell transfection experiments mapped the TGF-beta-responsive element (TbRE) of the COL1A2 promoter to a 131 bp region that contains at least two cis-acting elements. Insertion of the TbRE upstream of the thymidine kinase promoter conferred TGF-beta inducibility to the otherwise unresponsive thymidine kinase promoter. Footprinting assays revealed that the TbRE contains two neighboring protein-bound sequences, termed Box 3A and Box B. Within Box 3A is an Sp1 recognition sequence whose structural integrity is required for nuclear protein binding in vitro, and for promoter inducibility in vivo. Gel mobility shift assays documented increased binding to the TbRE of nuclear proteins from TGF-beta-treated cells compared with those from TGF-beta-untreated fibroblasts. There was, however, no binding increase with Box 3A alone or with an Sp1 oligonucleotide. Thus, the results strongly suggest a functional interaction between Sp1 and other components of the TbRE complex in mediating TGF-beta stimulation of COL1A2 gene expression.