Tumor necrosis factor-α (TNF-α) contributes to demyelinating diseases in the central nervous system. Astrocytes, the major glial cells in the CNS, do not constitutively express TNF-α, but the TNF-α gene is transcriptionally activated in response to a variety of stimuli, including TNF-α itself. Because of the importance of TNF-α in the CNS, we examined the mechanisms underlying transcriptional regulation of the TNF-α gene in astrocytes. In transient transfection assays, a plasmid construct containing 1.3 kilobase pairs (kb) of 5' flanking sequence of the rat TNF-α gene showed high basal activity that could not be further enhanced by TNF-α stimulation. A 'marked' 10-kb TNF-α gene construct, which contains the whole TNF-β gene with 1.2 kb of 5' flanking sequence, 1.1 kb of intergenic sequence, and the whole TNF-α gene with 3 kb of 3' flanking sequence, was able to respond to TNF-α stimulation. Analysis of a series of 5' and 3' deletion constructs of the marked TNF-α genes demonstrated that upstream sequence elements such as NF-κB are not required for TNF-α induction and that TNF-α responsive elements are located in the 3' flanking region of the TNF-α gene. We also found that a TNF-α-inducible DNase I-hypersensitive (DH) site is present in this 3' region whose deletion abolishes TNF-α inducibility of the marked TNF-α gene. Electrophoresis mobility shift assays showed that TNF-α- inducible nuclear proteins, consisting of p50 and p65 NF-κB proteins, specifically bind to two consecutive NF-κB binding sites within the 3' DH site. These results indicate that TNF-α-induced TNF-α gene expression in astrocytes involves p50 and p65 NF-κB proteins binding to downstream NF-κB sites and concomitant modulation of the chromatin structure.