By germline insertion, a long terminal repeat (LTR) of an intracisternal A-particle type IAP retrovirus has overtaken the transcriptional control of the rat oncomodulin (OM) gene, which codes for a high affinity Ca²⁺-binding protein with modulatory capacity. In order to get insights into regulatory mechanisms of LTR directed OM gene expression we tested promoter activity of this LTR by transient transfection of transformed rat fibroblasts with this sequence placed 5' of the human growth hormone hGH reporter gene. The OM LTR is a strong promoter but does not follow an expression pattern similar to the one of the OM gene. Genomic sequencing showed a good correlation between CpG hypomethylation in the OM LTR and OM transcription among various cell lines and tissues. DNase I mapping of a 18 kb fragment containing the OM gene and 5' flanking sequences revealed cell-line specific hypersensitivity sites located within the U3 region of the LTR element. Several cis-elements in the OM LTR promoter exhibiting cell-line specific occupancy were identified by in vivo DMS-footprinting. Detailed analysis of protein interactions with two such sequence elements in vitro revealed binding of ubiquitously expressed nuclear factors within an AP-1 (activator protein 1) and a intracisternal A-particle upstream enhancer recognition sequence. Protein occupancy to the latter sequence is significantly reduced by CpG methylation. These results indicate that cell-line specificity of OM expression is dictated by factor accessibility to the LTR promoter.