Recently, four genes (TAP1, TAP2, LMP2, LMP7) involved or potentially involved in the processing and transport of major histocompatibility complex class I-associated antigen to the endoplasmic reticulum have been identified. We now report the initial characterization of the bidirectional promoter for the human transporter associated with antigen processing 1 (TAP1) and low molecular mass polypeptide 2 (LMP2) genes. These genes are divergently transcribed from a central promoter region of only 593 bp. Functional analysis using a bidirectional reporter system demonstrates the minimal 593-bp promoter is sufficient for concurrent expression in both directions. There is no TATA box homology at either end but there is a prevalence of GC boxes. Transcription is initiated at multiple sites for each gene without any of the TAP1 transcripts overlapping with the LMP2 transcripts. The region proximal to the TAP1 gene is required for maximal basal level expression of not only TAP1 but also LMP2. Furthermore, this region is necessary for tumor necrosis factor alpha (TNF-alpha) induction of both genes. Site-specific mutations of an NF-kappa B element in the TAP1 proximal region blocked induction by TNF-alpha in both the TAP1 and LMP2 directions. An adjacent GC box was required for basal expression of both genes as well as augmenting the TNF-alpha induction of the distal LMP2 gene. In vivo genomic foot-printing of this region revealed strong protein/DNA interactions at the NF-kappa B and GC box consensus sequences. In vitro binding studies confirmed the capacity of the NF-kappa B site to bind p50/p65 and p52/p65 heterodimers and of the GC box to bind Sp1. Thus, the promoter elements proximal to the TAP1 gene play a significant role in regulating basal and induced expression of both TAP1 and LMP2. The findings presented in this report clearly link LMP2 expression with TAP1 expression and provide additional suggestive evidence linking LMP2 to class I antigen presentation.