The paired-related homeobox genes, Prx1 and Prx2, are important for normal skeletal and cardiovascular development as well as adult vascular remodeling. The identification and characterization of Prx downstream targets is crucial to understanding their function in normal developmental processes and congenital malformations. To identify Prx2 regulated genes, stably transfected NIH3T3 clones expressing Prx2 sense or antisense transcripts were generated. Expression profiles initially were established for two of the clones using Affymetrix GeneChip arrays. Over 6,400 genes were screened by the microarray approach, and approximately 500 genes differed in expression by a factor of two or more. Fifteen genes were chosen for further analysis. RT-PCR of the two transfectants used in the GeneChip analysis demonstrated that five out of the 15 genes were differentially expressed. However, after screening additional stable transfectant clones only one of the 15 genes, Protease Nexin-1 (PN-1), was differentially expressed. Subsequent Northern blot, RT-PCR, and further GeneChip analysis of additional stable transfectants confirmed that PN-1 expression is increased at least fivefold when Prx2 is overexpressed. It was demonstrated that Prx2 directly regulates PN-1 because (1) Prx2 binds to a cis element in the PN-1 promoter in vitro, and (2) Prx2 regulates the PN-1 promoter in transient transfection assays. The GeneChip analysis generated a prioritized list of other potential targets. The utility and limitations of cell culture models combined with microarray analysis for elucidating complex regulatory cascades are discussed.