The rat D2 dopamine receptor gene is transcribed from a TATA-less promoter that has an initiator-like sequence and several putative Sp1 binding sites. We previously reported that a negative modulator is located between nucleotides -116 and -76 (D2Neg-B) in this gene and that Sp1 as well as another unknown factor bind to this region (Minowa et al., J. Biol. Chem. 269, 11656, 1994). In the present investigation employing the in situ filter detection method, we identified this factor as Sp3. Anti-Sp3 antiserum used in gel-shift assays also revealed that Sp3 binds to the D2Neg-B sequence. Cotransfection of Drosophila Schneider's SL2 cells with Sp3 or Sp1 expression plasmids in the presence of CAT reporter plasmids containing D2 promoter regions demonstrated that Sp1 increased CAT activity in a dose-dependent manner, whereas Sp3, either alone or in the presence of Sp1, failed to activate or repress transcription. On the other hand, using the TATA-containing reporter plasmid BCAT-2, Sp3 coexpression significantly repressed Sp1-induced trans-activation, although Sp3 alone was ineffective. Thus, the transcriptional activity of Sp3 is dependent on the promoter context, and the negative regulation of D2 gene expression appears quite complex and may not depend simply on known DNA-protein interactions involving only Sp1 and Sp3.