Stearoyl-CoA desaturase is the rate-limiting enzyme in the production of mono-unsaturated fatty acids. We have recently cloned and characterized the human Scd cDNA and SCD (the stearoyl-CoA desaturase structural gene) on chromosome 10, as well as the non-transcribed pseudogene on chromosome 17. In order to further define SCD regulation and function, we have isolated and characterized the promoter of the structural gene. Screening of chromosome-10-specific libraries resulted in the isolation of 4.1 kb of SCD sequence upstream of the translation start site. Binding sites for transcription factors critical for mouse Scd1 and Scd2 promoter activity, such as sterol-regulated-element-binding protein and nuclear factor Y, were present in the human SCD promoter (Scd is the mouse stearoyl-CoA desaturase gene). Deletion analysis in HaCaT keratinocytes identified a critical region for promoter activity between nts 496-609 upstream of the translation start site. Site-directed mutagenesis of binding sites in this region identified the CCAAT box as the critical cis-element for SCD promoter activity. An electrophoretic mobility-shift assay confirmed that this element binds nuclear proteins from HaCaT keratinocytes. The polyunsaturated-fatty-acid (PUFA) response element, previously identified in the promoters of mouse Scd1 and Scd2, was found to be conserved in the human SCD promoter, and contained the critical CCAAT cis-element. A minimal promoter construct including this region was responsive to fatty acids, with oleate and linoleate decreasing transcription and stearate increasing it. These studies indicate that CCAAT-box-binding proteins activate SCD transcription in cultured keratinocytes and that fatty acids modulate transcription, most likely through the conserved PUFA response element.