Direct interaction between transcription factors may provide a mechanism for the regulatory function of these proteins on transcription of the responsive genes. These interactions may be facilitated if the target DNA sequences for the participant regulatory proteins are overlapped or positioned in close proximity to each other within the promoter of the responsive genes. In earlier studies, we identified a cellular protein, named Puralpha, which upon binding to the MB1 regulatory DNA sequence of the myelin basic protein (MBP) gene, stimulates its transcription in central nervous system (CNS) cells. Here, we provide evidence for binding of the ubiquitous DNA binding transcription factor, Sp1, to the MB1 DNA motif at the region that partially overlaps with the Puralpha binding site. We demonstrate that binding of Puralpha to its target sequence is enhanced by inclusion of Sp1 in the binding reaction. Under this condition, binding of Sp1 to the MB1 regulatory sequence remained fairly unchanged, and no evidence for the formation of Puralpha:MB1:Sp1 was observed. This observation suggests that transient interaction of Puralpha and Sp1 may result in stable association of Puralpha and the MB1 element. In support of this notion, results from immunoprecipitation/Western blot studies have established association of Puralpha and Sp1 in nuclear extracts from mouse brain. Of interest, Puralpha appears to bind to the phosphorylated form of Sp1 which is developmentally regulated and that coincides with the periods when MBP gene expression is at its maximum level. Results from cotransfection studies revealed that ectopic expression of Puralpha and Sp1 synergistically stimulates MBP promoter activity in CNS cells. The importance of these findings in stage-specific expression of MBP during brain development is discussed.