The neural cell adhesion molecule (N-CAM), is expressed in definite spatiotemporal patterns during development. To identify factors that may influence place-dependent n-cam gene expression, we have studied the binding and activation of the n-cam promoter by Pax-8, a member of the Pax family of transcription factors. Pax-8 increased n-cam promoter activity 13.4-fold in cellular co-transfection experiments, and a short segment of the promoter (-143 to -15) mediated the response. This region of the n-cam promoter produced a DNA-protein complex when incubated with either extracts from COS-7 cells transfected with the Pax-8 expression vector or a Pax-8/GST fusion protein. Pax-8 bound to the n-cam promoter through two TGCTCC motifs (designated PBS-1 and PBS-2) that resemble paired domain binding sites. Mutation of PBS-1 and PBS-2 eliminated Pax-8 activation of the n-cam promoter. Transfection of N2A neuroblastoma cells with the Pax-8 expression vector resulted in a 5-fold increase in the transcription of the endogenous n-cam gene. The combined results suggest that Pax-8 activates transcription of the n-cam gene through binding of sequences resembling paired domain binding sites in the n-cam promoter. The data raise the possibility that the n-cam promoter may be regulated by other members of the Pax gene family.