We have investigated the transcriptional regulation of the Antennapedia P2 (Antp P2) promoter using nuclear extracts prepared from Drosophila embryos. Transcriptional analysis of deletion mutants reveals the presence of multiple cis-regulatory elements located both upstream and downstream of the start site. One of the elements appears to mediate negative regulation, since deletion of this element results in higher levels of transcription. Several factors that interact with these control elements have been detected and isolated. One DNA-binding protein, Drosophila Transcription Factor-1 (DTF-1), specifically recognizes the consensus sequence GCAACAT/CG/C that is reiterated four times within an upstream activating element. DTF-1 was purified by sequence-specific DNA affinity chromatography and identified as a doublet of approximately 50 kD. Purified DTF-1 enhances transcription from the Antp P2 promoter 7- to 15-fold in a binding site-dependent manner.