The genes of the distal-less ( Dlx) gene family encode homeodomain transcription factors involved in the development of the brain, branchial arches, limbs, teeth, olfactory placodes and otic vesicles. In mice and humans, six Dlx genes have been identified and are organized in bigene clusters. The I56i cis-acting regulatory element is located within the intergenic region of the Dlx5/Dlx6 locus. This element has been shown to be active in the forebrain (telencephalon and diencephalon), the first and second branchial arches, and the apical ectodermal ridge. In this study, we identified eight putative transcription factor binding regions within the sequence of the I56i enhancer using DNaseI footprinting. These included putative binding sites for GATA-1, Engrailed-1, DLX and homeodomain transcription factors. Three to eight base-pair mutations were introduced into these putative binding sites. The effect of mutagenesis of four of these putative binding sites was evaluated in vivo in transgenic mice using a lacZ-beta-globin minimal promoter construct and in vitro using electrophoretic mobility shift assays (EMSA). Activity of the mutant enhancer in the forebrain of mouse embryos was reduced in some of the transgenic animals obtained. A reduction or complete loss of activity was seen in the branchial arches of all but one of the transgenic mice carrying the mutant enhancer constructs. EMSA demonstrated that proteins from the nuclear extracts of E11.5 mouse brains and E13.5 mouse forebrains bind fragments of DNA corresponding to the 156i enhancer sequences. Further, mutagenesis of the putative binding sites appears to reduce the ability of proteins to bind these areas of the I56i enhancer sequences. These experiments provide preliminary evidence suggesting that a number of factors may be involved in regulating the activity of the I56i enhancer and demonstrating the potential role of the I56i enhancer in the regulation of gene expression in the forebrain and branchial arches.