Id-1, a member of the helix-loop-helix transcription factor family, inhibits the differentiation of Rcho-1 cells, which were derived from rat choriocarcinoma and consist of trophoblast stem cells. Id-1 is expressed at a high level in undifferentiated trophoblast stem cells and then down-regulated during early differentiation, and is thought to be a key regulator in the trophoblast giant-cell differentiation pathway. In this study, we analyzed the signaling mechanism regulating the high expression levels of Id-1 in undifferentiated Rcho-1 cells. Promoter deletion analysis revealed that a 31-bp sequence (Box-2 region), located between -200 and -169bp in the Id-1 promoter is necessary for the promoter activity. Electrophoretic mobility shift assays and DNA affinity precipitation assays showed that Box-2-binding activity was decreased during differentiation and that Sp-1 protein bound to this sequence. The protein level of Sp-1 was decreased during the differentiation. These results suggest that the Sp-1 protein level may regulate the Box-2-binding activity and the trophoblast giant-cell differentiation.