In previous work, we delineated a proximal region of the human alpha1(I) collagen gene (COL1A1) promoter necessary to direct its basal transcription in fibroblasts. This region has potential recognition sites for a variety of DNA-binding proteins. Here, we show that the -129/-107-bp sequence in this region of the promoter, which harbors an inverted CCAAT motif closely linked to a GC-rich direct repeat and is perfectly conserved between mouse and human, specifically bound the transcription factors Sp1, Sp3, and CTF/NF-1 in nuclear extracts from human skin and lung fibroblasts. Drosophila Schneider L2 cells lacking endogenous Sp activity were used to investigate the effect of expression of Sp or CTF/NF-1 transcription factors on COLlAl promoter activity. Expression of Sp1 caused potent trans-activation of a COL1A1 promoter (-174 to +42bp). In contrast, expression of Sp3, which binds to the same recognition sites as Sp1, and CTF/NF-1 stimulated COL1A1 promoter activity only at higher concentrations, and Sp2 did not transactivate. Expression of a 10-fold excess of Sp3, but not CTF/NF-1 or Sp2, abrogated the stimulation of COL1A1 promoter activity induced by Sp1. TGF-beta at concentrations previously shown to increase COL1A1 transcription caused a decrease in the relative amount of Sp3 in fibroblast nuclear extracts. These results suggest that both Sp1 and Sp3 bind to the proximal COL1A1 promoter and stimulate its activity; however, their interaction with each other may result in repression of Sp1-induced COL1A1 transcription. Alterations in the relative amounts or DNA-binding activities of these transcription factors in a cell- or signal-specific manner may contribute to the control of transcription from the COL1A1 promoter. The present findings, and recent observations implicating Sp1 and its homologs in regulating the expression of several collagen genes, suggest that the family of Sp1 transcription factors play a role in physiological and pathological modulation of connective tissue accumulation.