The transcriptional regulation of the murine IP-10 gene in lipopolysaccharide (LPS) or interferon gamma (IFN gamma)-treated macrophages was investigated by analysis of regions of the gene that flank the transcription start site. A series of sequence fragments were placed 5' to the chloramphenicol acetyltransferase (CAT) reporter gene and ability to mediate transcription of CAT in response to IFN gamma or LPS treatment was studied following transient transfection in the macrophage-like cell line RAW 264.7. Analysis of larger constructs identified a potential negative regulatory site for IFN gamma response in the region between nucleotide positions -2002 and -930 and a positive regulator for LPS response in the region between bases -930 and -676. A 227-base fragment spanning positions -228 to -2 was the minimal sequence able to mediate LPS- and IFN gamma-dependent transcription of CAT. Deletion of 24 bases, which included a highly conserved IFN stimulus response element (ISRE) from the -228 construct, abolished response to IFN gamma. A 33-base fragment containing the IP-10 ISRE was able to confer both IFN gamma and LPS sensitivity upon a heterologous promoter. The ability of LPS to stimulate CAT via the ISRE was apparently mediated by intermediate expression of endogenous IFN alpha/beta. Elimination of bases -204 to -102 abolished sensitivity to LPS. This region contains two kappa B binding sites. Site-directed mutagenesis of key nucleotides in the ISRE and the two kappa B sites demonstrated that optimal response to IFN gamma required both the ISRE and one of the two kappa B sites, whereas optimal response to LPS required either both kappa B sites or one kappa B site and the ISRE. IFN gamma or LPS treatment induced sequence-specific binding activity for the ISRE and the two kappa B sites. These results indicate that the 230 nucleotides upstream from the transcription start site are important for transcriptional control of the IP-10 gene in response to IFN gamma and LPS. The three defined regulatory elements function in distinct fashion for each of the two stimuli; optimal response to either IFN gamma or LPS requires cooperation between at least two sites.