During early development of the mouse embryo, expression of the metallothionein-I (MT-I) gene is heightened specifically in the endoderm cells of the visceral yolk sac. The mechanisms of regulation of this cell-specific pattern of expression of metallothionein-I are unknown. However, it has recently been shown that MTF-1, functioning as a metalloregulatory transcription factor, activates metallothionein genes in response to the essential metal zinc. In contrast with the metallothionein genes, MTF-1 is essential for development: null mutant embryos die due to liver degeneration. We report here that MTF-1 is absolutely essential for upregulation of MT-I gene expression in visceral endoderm cells and that optimal expression also involves interactions of the basic helix-loop-helix upstream stimulatory factor-1 (USF1) with an E-box1-containing sequence at -223 bp in the MT-I promoter. Expression of MT-I in visceral endoderm cells was dependent on maternal dietary zinc. Thus, the essential metal, zinc, apparently provides the signaling ligand that activates cell-specific MT-I expression in visceral endoderm cells.