The mouse alcohol dehydrogenase gene Adh-1 contains an unusually long alternating purine-pyrimidine sequence within its first intron. This alternating sequence differs in length between strains that differ in the extent of Adh-1 expression, and it has been suggested that it plays a role in gene expression. We demonstrate that this alternating sequence can form Z-DNA in vitro. The alternating sequence can act as a positive regulatory element in transient transfection assays in hepatoma cell lines, but not in CV-1 (monkey kidney) cells, suggesting that it can act as a tissue-specific regulatory element. Nuclear run-on experiments showed that the differential expression of Adh-1 from high- and low-activity strains is, however, controlled at the post-transcription level.