AbstractSummary: Sonic hedgehog signaling plays a critical role in vertebrate patterning, and signaling defects are associated with severe birth defects and cancer in man. GLI1 encodes a critical transcription activator in this pathway. GLI1 is expressed in human basal cell carcinomas and sarcomas. Despite the significance of the GLI1 gene in human disease, few immediate upstream regulators of GLI1 expression are known. We previously demonstrated that a 5′ region, including 5′ flanking sequence, an untranslated exon, and 425 bp of the first intron, regulates the human GLI1 gene. Here we show that inactivating mutations in E‐box, GC box, AP‐2, GATA, GSG, PuF, and Zeste sites identified three critical regulatory elements, including a GC box that binds Sp1 and two intronic E‐boxes that bind USF proteins or Twist. Expression of Twist but not a frame shift mutation of Twist activates the wild‐type human GLI1 regulatory sequences but not with inactivating mutations of the E‐boxes. Twist activates GLI1 reporter expression through E‐box +482 but requires binding of USF proteins to E‐box +157. Twist mutations cause human birth defects and Twist is overexpressed in many rhabdomyosarcomas, suggesting that one of Twist's primary roles is the regulation of GLI1. genesis 32:247–258, 2002. © 2002 Wiley‐Liss, Inc.