PACE4 is a member of the mammalian subtilisin-like proprotein convertase (SPC) family, which contribute to the activation of transforming growth factor (TGF) beta family proteins. We previously reported that PACE4 is highly expressed in syncytiotrophoblasts of human placenta [Tsuji et al. (2003) BIOCHIM: Biophys. Acta 1645, 95-104]. In this study, the regulatory mechanism for PACE4 expression in placenta was analyzed using a human placental choriocarcinoma cell line, BeWo cells. Promoter analysis indicated that an E-box cluster (E4-E9) in the 5'-flanking region of the PACE4 gene acts as a negative regulatory element. The binding of human achaete-scute homologue 2 (Hash-2) to the E-box cluster was shown by gel mobility-shift assay. The overexpression of Hash-2 caused a marked decrease in PACE4 gene expression. When BeWo cells were grown under low oxygen (2%) conditions, the expression of Hash-2 decreased, while that of PACE4 increased. In both cases, other SPCs, such as furin, PC5/6, and PC7/8, were not affected. Further, PACE4 expression was found to be developmentally regulated in rat placenta. By in situ hybridization, Mash-2 (mammalian achaete-scute homologue 2) mRNA was found to be expressed in the spongiotrophoblast layer where PACE4 was not expressed. In contrast, the PACE4 mRNA was expressed mainly in the labyrinthine layer where Mash-2 was not detected. These results suggest that PACE4 expression is down-regulated by Hash-2/Mash-2 in both human and rat placenta and that many bioactive proteins might be regulated by PACE4 activity.