In an effort to identify cis-acting elements that respond to signals controlling different stages of neural differentiation, we have analyzed the promoter and surrounding regulatory sequences of the rat GAP-43 gene. Expression of this gene is both neural specific and, within neurons, strongly modulated by signals related to axon integrity. Expression analysis in cell lines and primary rat cortical cultures demonstrates that neural-selective gene expression can be directed by a 386 base pair GAP-43 promoter fragment that contains canonical TATA and CCAAT box consensus sequences. A short region of homology with other neural-specific genes, identified upstream of the core promoter, is not essential for selective expression in neuronal cells. Within cortical cell cultures, expression is strongly modulated by two interacting elements on either side of the promoter, each of which contains a sequence with the potential to adopt an unusual DNA conformation. While each of these flanking elements reduces expression when added alone to the core promoter, each counteracts the negative influence of the other when both elements are present.