Selective transcription of the insulin gene in pancreatic beta cells is regulated by its enhancer, located within the 5'-flanking region of the insulin gene. Transcription from the enhancer is controlled by both positive- and negative-acting cellular transcription factors. It was previously shown that both the 243- and 289-amino-acid adenovirus type 5 E1a proteins can repress insulin gene transcription in vivo. To localize the insulin DNA sequences involved in this response, we examined the effects of a number of mutations within the 5'-flanking region of the rat insulin II gene on E1a-mediated repression of insulin gene transcription. We have found that E1a proteins inhibit enhancer-stimulated transcription of the insulin gene. The enhancer appears to contain at least two genetically separable and independent E1a target sequence elements. Interestingly, these same regions of the insulin enhancer have been shown to be negatively regulated by cellular transcription factors. These results suggest that E1a-like cellular factors may function in the pancreatic beta-cell-specific expression of the insulin gene.