The apolipoprotein E (APOE) gene causes a major risk factor for the development of Alzheimer's disease (AD). To study the transcription control of the mouse (m) APOE gene, we first tested the promoter activity of a 721-base-pair (bp) 5'-flanking region, which is located 771 bp upstream from the translation initiation codon. We cloned the 721-bp region upstream of the reporter chloramphenicol acetyl transferase (CAT) gene into a promoterless vector (pBLCAT3). The mAPOE promoter and vector DNA were separately transfected in rat glial C6 and neuronal PC12 cell lines. The 721-bp APOE region (from position 329 to 1050) is functionally active in different cell lines tested. The serial deletion analysis indicates that the 266-bp promoter region (from 784 to 1050) has the highest and the 67-bp region (from 983 to 1050) the lowest activity on the reporter gene in neuronal and astrocytic cell lines. These studies suggest that the 147-bp region (from 637 to 784) has a negative regulatory effect on the reporter gene. In the gel shift assay, the 67-bp region binds to a specific transcription factor(s) in PC12 nuclear extracts. Our results suggest that mAPOE can also be expressed in neuronal cells in addition to the astrocytic cells. Characterization of mAPOE promoter is important for the AD drug development discovery and APOE transgenic mice studies.