Acetylcholinesterase in man is encoded by a single gene, ACHE, located on chromosome 7q22. In this study, the transcription start sites and major DNA promoter elements controlling the expression of this gene have been characterized by structural and functional studies. Immediately upstream of the first untranslated exon of the gene are GC-rich sequences containing consensus binding sites for several transcription factors, including Sp1, EGR-1 and AP2. In vitro transcription studies and RNase protection analyses of mRNA isolated from human NT2/D1 teratocarcinoma cells reveal that two closely spaced transcription cap sites are located at a consensus initiator (Inr) element similar to that found in the terminal transferase gene. Transient transfection of mutant genes shows that removal of three bases of this initiator sequence reduces promoter activity by 98% in NT2/D1 cells. In vitro transcription studies and transient transfection of a series of 5' deletion mutants of the ACHE promoter linked to a luciferase reporter show an Sp1 site at -71 to be essential for promoter activity. Purified Sp1 protein protects this site from DNase cleavage during in vitro footprinting experiments. A conserved AP2 consensus binding site, located between the GC box elements and the Inr, is protected by recombinant AP2 protein in DNase footprinting experiments, induces a mobility shift with AP2 protein and AP2-containing cell extracts, and fosters inhibition of transcription by AP2 as measured by transient transfection in mouse and human cell lines and in in vitro transcription reactions. These results indicate that AP2 functions as a repressor of human ACHE and mouse Ache transcription.