CIC-2 is a pH- and voltage-activated chloride channel, which is highly expressed in fetal airways and downregulated at birth. The CIC-2 promoter contains consensus binding sites within the first 237 bp, which bind transcription factors Sp1 and Sp3(1). This study directly links Sp1 and Spa with CIC-2 protein expression by demonstrating: (i) induction of CIC-2 protein by transient overexpression of each transcription factor in adult rat Type II cells, which have low levels of CIC-2; and (it) reduction of CIC-2 expression by incubation with a competitive inhibitor of Sp1 and Spa in fetal ratType II cells, which have high levels of endogenous CIC-2. Endogenous fetal lung Sp1 is differentially expressed as two major species of 105 kD and 95 kD. Although low-level expression of Sp1 in adult cells is almost exclusively the 105-kD species, overexpression of Sp1 results in increased expression of the 95-kD band. These experiments suggest that the mechanism for postnatal reduction of CIC-2 expression in lung epithelia is based on decreased interaction of Sp1 and Spa with the CIC-2 promoter.