Type 2C protein phosphatases (PP2Cs), a class of ubiquitous and evolutionally conserved serine/threonine protein phosphatases, are encoded in at least four distinct genes and implicated in the regulation of various cellular functions. Of these four PP2C genes, the expression of the PP2Cbeta gene has been reported to be tissue-specific and development-dependent. To understand more precisely the regulatory mechanism of this expression, we have isolated and characterized overlapping mouse genomic lambda clones. A comparison of genomic sequences with PP2Cbeta cDNA sequences provided information on the structure and localization of intron/exon boundaries and indicated that PP2Cbeta isoforms with different 5' termini were generated by alternative splicing of its pre-mRNA. The 5'-flanking region of exon 1 had features characteristic of a housekeeping gene: it was GC-rich, lacked TATA boxes and CAAT boxes in the standard positions, and contained potential binding sites for the transcription factor SP1. In the 5'-flanking region of exon 2, several consensus sequences were found, such as a TATA-like sequence and negative regulatory element box-1, -2 and -3. Subsequent analysis by transient transfection assay with a reporter gene showed that these regions act as distinct promoters. Analysis of PP2Cbeta transcripts by reverse transcriptase-PCR showed that exon-1 transcripts were expressed ubiquitously in all of the tissues examined, whereas exon-2 transcripts were predominantly expressed in the testis, intestine and liver. These results suggest that the alternative usage of two promoters within the PP2Cbeta gene regulates tissue-specific expression of PP2Cbeta mRNA.