The transcription factor human X-box binding protein 1 (hXBP-1) is a basic region-leucine zipper protein implicated in the regulation of major histocompatibility complex class II gene expression as well as in exocrine gland and skeletal development. Multiple regulatory elements in the hXBP-1 promoter lie 3' to the transcription start site, including the hX2 site, whose core sequence is an AP-1-like element identical to the hXBP-1 target sequence in the HLA-DRA promoter. One complex identified by electrophoretic mobility shift assay (EMSA), complex 3, was previously shown to protect the hX2 site and more 3' bases. Sequence analysis now shows that this region contains a consensus binding site for transcription factor BSAP (B cell lineage-specific activator protein). Complex 3 and BSAP have identical cell-type specificities, as they are found only in pre-B and mature B cell lines. In EMSAs, BSAP antibody specifically recognized complex 3, and in vitro translated BSAP could bind to an hXBP promoter fragment. Cotransfections using an hXBP-1 reporter construct indicated that BSAP downregulates the hXBP-1 promoter. The highest levels of hXBP-1 mRNA were found when BSAP was not expressed, in pre-Pro-B cells and in plasma cell lines. In addition, hXBP-1 and BSAP levels were inversely correlated along the early stages of B cell development. In the regulation of the hXBP-1 promoter, a strong positive transcriptional influence at the hX2 site is opposed by the downregulatory actions of BSAP.