The Tie gene encodes an endothelial cell receptor tyrosine kinase necessary for normal vascular development. The Tie gene promoter targets expression of heterologous genes specifically to endothelial cells in transgenic mice. Here we have characterized the promoter sequences critical for endothelial cell-specific activity in cultured cells and transgenic mice. Progressive deletions and site-directed mutations of the promoter showed that the critical endothelial cell-specific elements are an octamer transcription factor binding site and several Ets binding sites located in two clusters within 300 bp upstream of the major transcription initiation site. Among members of the Ets transcription factor family tested, NERF-2 (a novel transcription factor related to the ets factor ELF-1), which is expressed in endothelial cells, and ETS2 showed the strongest transactivation of the Tie promoter; ETS1 gave lower levels of stimulation and the other Ets factors gave little or no transactivation. Furthermore, the Tie promoter directed the production of high amounts of human growth hormone into the circulation of transgenic mice. The secreted amounts correlated with transgene copy number, being relatively insensitive to the effects of the transgene integration site. These properties suggest that Tie promoter activity is controlled by endothelial cell Ets factors and that it has potential for use in vectors for endothelial cell-specific gene expression.