The formation of various tissues requires close communication between two groups of cells, epithelial and mesenchymal cells. COUP-TFs are transcription factors which have been shown to have functions in embryonic development. COUP-TFI is expressed mainly in the nervous system, and its targeted deletion leads to defects in the central and peripheral nervous systems. COUP-TFII is highly expressed in the mesenchymal component of the developing organs. A null mutation of COUP-TFII results in the malformation of the heart and blood vessels. From their expression pattern, we proposed that COUP-TFs regulate paracrine signals important for mesenchymal cell-epithelial cell interactions. In order to identify genes regulated by COUP-TF in this process, a rat urogenital mesenchymal cell line was stably transfected with a COUP-TFI expression vector. We found that NGFI-A, a gene with important functions in brain, organ, and vasculature development, has elevated mRNA and protein levels upon overexpression of COUP-TFI in these cells. A study of the promoter region of this gene identified a COUP-TF-responsive element between positions −64 and −46. Surprisingly, this region includes binding sites for members of the Sp1 family of transcription factors but no COUP-TF binding site. Mutations that abolish the Sp1 binding activity also impair the transactivation of the NGFI-A promoter by COUP-TF. Two regions of the COUP-TF molecule are shown to be important for NGFI-A activation: the DNA binding domain and the extreme C terminus of the putative ligand binding domain. The C-terminal region is likely to be important for interaction with coactivators. In fact, the coactivators p300 and steroid receptor activator 1 can enhance the transactivation of the NGFI-A promoter induced by COUP-TFI. Finally, we demonstrated that COUP-TF can directly interact with Sp1. Taken together, these results suggest that NGFI-A is a target gene for COUP-TFs and that the Sp1 family of transcription factors mediates its regulation by COUP-TFs.