Autosomal recessive polycystic kidney disease, an inherited disorder characterized by the formation of cysts in renal collecting ducts and biliary dysgenesis, is caused by mutations of the polycystic kidney and hepatic disease 1 (PKHD1) gene. Expression of PKHD1 is tissue specific and developmentally regulated. Here, we show that a 2.0-kb genomic fragment containing the proximal promoter of mouse Pkhd1 directs tissue-specific expression of a lacZ reporter gene in transgenic mice. LacZ is expressed in renal collecting ducts beginning during embryonic development but is not expressed in extrarenal tissues. The Pkhd1 promoter contains a binding site for the transcription factor hepatocyte nuclear factor (HNF)-1β, which is required for activity in transfected cells. Mutation of the HNF-1β-binding site abolishes the expression of the lacZ reporter gene in renal collecting ducts. Transgenes containing the 2.0-kb promoter and 2.7 kb of additional genomic sequence extending downstream to the second exon are expressed in the kidney, intrahepatic bile ducts, and male reproductive tract. This pattern overlaps with the endogenous expression of Pkhd1 and coincides with sites of expression of HNF-1β. We conclude that the proximal 2.0-kb promoter is sufficient for tissue-specific expression of Pkhd1 in renal collecting ducts in vivo and that HNF-1β is required for Pkhd1 promoter activity in collecting ducts. Additional genomic sequences located from exons 1-2 or elsewhere in the gene locus are required for expression in extrarenal tissues.