During heart development, cells of the endocardial cushions undergo an epithelial-mesenchymal transformation and migrate into the surrounding extracellular matrix. This event is required for the normal formation of valves and chamber septation. Coincident with this phenotypic change is the expression of the serine protease urokinase by the mesenchymal cells. This protease plays an important role in remodeling of the matrix, promotion of cell migration by regulating cell-matrix interactions, and the activation of growth factors. To understand the mechanisms underlying the expression of urokinase during heart development, studies were designed to analyze the role of the Ets transcription factors in the regulation of the avian urokinase gene promoter. Deletion or mutagenesis of the Ets consensus sites significantly decreased the activity of the promoter in isolated cushion tissue cells. Proteins were identified by electrophoretic mobility shift analysis and UV-crosslinking which bound to a specific region of the promoter shown to be required for full transcriptional activity. Analyses based upon protein molecular weight and interaction with specific antibodies suggest a role for the Ets-2 protein in promoter binding and activity. The expression of Ets-2 in the cushion tissue cells was confirmed by RT-PCR analysis and in situ hybridization. The mRNA levels and the DNA binding activity of the Ets-2 protein were found to change during development paralleling the increase in urokinase activity. Overexpression of the full-length Ets-2 protein or a dominant-negative form of the protein altered the activity of the promoter and significantly affected the production of urokinase in these cells. The results from these studies suggest an important role for the Ets-2 protein in heart development and may contribute to a better understanding of the inductive factors present in the heart which facilitate the normal morphogenesis of this organ.