Proteolytic processing of the beta-amyloid precursor protein (APP) at the beta site is essential to generate Abeta. BACE1, the major beta-secretase involved in cleaving APP, has been identified as a type 1 membrane-associated aspartyl protease. We have cloned a 2.1-kb fragment upstream of the human BACE1 gene and identified key regions necessary for promoter activity. BACE1 gene expression is controlled by a TATA-less promoter. The region of bp -619 to +46 is the minimal promoter to control the transcription of the BACE1 gene. Several putative cis-acting elements, such as a GC box, HSF-1, a PU box, AP1, AP2, and lymphokine response element, are found in the 5' flanking region of the BACE1 gene. Transcriptional activation and gel shift assays demonstrated that the BACE1 promoter contains a functional Sp1 response element, and overexpression of the transcription factor Sp1 potentiates BACE gene expression and APP processing to generate Abeta. Furthermore, Sp1 knockout reduced BACE1 expression. These results suggest that BACE1 gene expression is tightly regulated at the transcriptional level and that the transcription factor Sp1 plays an important role in regulation of BACE1 to process APP generating Abeta in Alzheimer's disease.