Involvement of Alu sequences in the cell-specific regulation of transcription of the gamma chain of Fc and T cell receptors. The Fc epsilon RI-gamma chains are expressed in a variety of hematopoietic cells where they play a critical role in signal transduction. They are part of the high affinity IgE receptor in mast cells, basophils, Langerhans cells, and possibly other cells; a component of the low affinity receptor for IgG (Fc gamma RIIIA or CD16) in natural killer cells and macrophages; and part of the T cell antigen receptor in subsets of T cells. Here we have investigated the transcriptional regulation of the gamma chain gene by analyzing the 2.5-kilobase sequence upstream of the transcription start site. This sequence contains a promoter specific to cells of hematopoietic lineage. However, the tissue specificity of this promoter is only partial because it is active in all of the hematopoietic cells tested here, regardless of whether they constitutively express Fc epsilon RI- gamma chain transcripts. We have identified two adjacent cis-acting regulatory elements, both of which are part of an Alu repeat. The first (-445/-366) is a positive element active in both basophils and T cells. The second (-365/-264) binds to nuclear factors, which appear to be different in basophils and T cells, and acts as a negative element in basophils and as a positive one in T cells. Thus, this Alu repeat (90% identical to Alu consensus sequences) has evolved to become both a positive and negative regulator.