The gene that encodes a proteoglycan peptide core rich in serine and glycine (SG-PG) is selectively expressed by hematopoietic cells that store in their cytoplasmic granules negatively charged proteoglycans bound ionically to numerous positively charged proteins. With deletion analysis, a negative transcription regulatory element was located between residues -250 and -190 of the 5'-flanking region of the mouse SG-PG gene, and a positive regulatory element was located between residues -118 and -81. The negative regulatory element was dominantly active in fibroblasts that do not express the SG-PG gene whereas the positive regulatory element was dominantly active in hematopoietic cells that do express the SG-PG gene. Site-directed mutagenesis was used to demonstrate that the proximal element within the gene's atypical promoter resided between residues -40 and -20. As assessed by gel mobility shift analyses, the nuclei of rat basophilic leukemia-1 cells and rat-1 fibroblasts contain a number of trans-acting factors that interact with the positive and negative cis-acting regulatory elements of the SG-PG gene. Furthermore, some of these trans-acting factors appear to be different for the two cell types. These studies on cell types that do and do not express the SG-PG gene indicate that transcription of this proteoglycan peptide core gene is regulated constitutively by both positive and negative cis-acting elements located 5' of an atypical promoter.