Myofibroblasts express alpha-smooth muscle actin and have a phenotype intermediate between fibroblasts and smooth muscle cells. Their emergence can be induced by cytokines such as transforming growth factor beta; but the regulatory mechanism for induction of alpha-smooth muscle actin gene expression in myofibroblast differentiation has not been determined. To examine this mechanism at the level of the alpha-smooth muscle actin promoter, rat lung fibroblasts were transfected with varying lengths of the alpha-smooth muscle actin promoter linked to the chloramphenicol acetyl transferase reporter gene and treated with transforming growth factor beta1. The results show that the shortest inducible promoter was 150 base pairs long, suggesting the presence in this region of cis-elements of potential importance in transforming growth factor beta1 induced myofibroblast differentiation. Transfection of "decoy" oligonucleotides corresponding to sequences for four suspected regulatory factors demonstrated that only the transforming growth factor beta control element is involved in the regulation of transforming growth factor beta1-induced alpha-smooth muscle actin expression in myofibroblast differentiation. Consistent with this conclusion is the finding that a mutation in the transforming growth factor beta control element caused a significant reduction in promoter activity. These observations taken together show that alpha-smooth muscle actin promoter regulation during myofibroblast differentiation is uniquely different from that in smooth muscle cells and other cell lines. Since myofibroblasts play a key role in wound contraction and synthesis of extracellular matrix, clarification of this differentiation mechanism should provide new insight into fibrogenesis and suggest future novel strategies for modulation of wound healing and controlling fibrosis.