alpha 1-Antitrypsin (AT), the major elastase inhibitor in mammalian serum, is produced primarily in the liver. We have characterized AT gene structure and expression in the mouse species Mus caroli, which expresses high levels of AT in the kidneys as well as in the liver. Analysis of cDNA and genomic clones showed that the AT gene in M. caroli exhibits high sequence homology (greater than 90%) to the gene in laboratory mice (M. domesticus) throughout the coding and 5'-flanking regions. Despite this extensive sequence conservation, the functional organization of cis-acting regulatory elements governing liver-specific expression is strikingly different between these species. Transient-transfection assays showed that the proximal region of the M. caroli promoter (i.e., between -120 and -2 relative to the transcriptional start site) is 10-fold more active than the analogous region of M. domesticus in driving the expression of an indicator gene in cultured liver cells. The increased activity of the proximal region of the M. caroli AT promoter appears to be the result of one or both of the two base substitutions at positions -46 and -48. The weak proximal promoter in M. domesticus is compensated for by the presence of upstream, liver-specific enhancers between -199 and -520; the analogous region in M. caroli is inactive. Thus, during the course of evolution, the modest 7% sequence divergence that has occurred between the 5'-flanking regions of the AT genes in these two species has generated distinct, yet equally effective, modes of hepatocyte-specific expression.