The adenomatous polyposis coli (APC) gene product is involved in cell cycle arrest and apoptosis, and loss of function is associated with the development of colorectal carcinogenesis. Although it has been demonstrated that the APC gene is inducible, its transcriptional regulation has not been elucidated. Therefore, we characterized the promoter region of the APC gene and transcription factors required for basal expression. The APC gene has a TATA‐less promoter and contains consensus binding sites for Octamer, AP2, Sp1, a CAAT‐box, and three nucleotide sequences for E‐box A, B, and M. The E‐boxes are functional in several cancer cell lines and upstream stimulating factor‐1 (USF1) and USF2 interact with these sites, with a preferred sequence‐specificity for the B site. Analysis of activation of the cloned APC promoter by USF1 and USF2 in transient transfection assays in HCT‐116 cells demonstrated that mutation of the E‐box B site completely abolished the basal promoter activity. Further, the ectopic USF1 and USF2 expression in HCT‐116 cells with deletion mutations of E‐box A, B, and M sites showed that these E‐boxes contribute to USF1‐ and USF2‐mediated transcriptional activation of the APC promoter, with maximum promoter activity being associated with the E‐box B site. Thus, USF1 and USF2 transcription factors are critical for APC gene expression. J. Cell. Biochem. 80:262–277, 2001. © 2001 Wiley‐Liss, Inc.