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An in vitro transcription system has been developed to study the transcriptional control of steroid hydroxylase gene expression in steroidogenic tissues using upstream sequences of these genes in rabbit beta-globin promoter/reporter constructs. Analysis of deletion mutants of the upstream region of the bovine CYP17 (p45017 alpha) gene in whole cell extracts prepared from mouse Y1 adrenocortical cells revealed that sequences activating transcription in vitro are identical to those previously identified in vivo, namely the novel cAMP-responsive sequences crsI (-243 to -225 base pairs) and crsII (-80 to -40 base pairs). These sequences do not contain the known cAMP response elements, CRE or AP-2. In similar extracts from nonsteroidogenic mouse SVT2 cells, crsI was unable to activate transcription. Partially purified protein factor(s) binding to crsI were prepared from Y1 extracts by crsI-specific DNA affinity chromatography. This fraction activated transcription in vitro in SVT2 extracts only when crsI was present in the template. This in vitro transcription system will permit further investigation of crsI and its cognate factors and of the transcriptional regulation of the other steroid hydroxylase genes.