The requirements for activation of the mouse alpha-fetoprotein (AFP) gene in transient heterokaryons were investigated. For this purpose, the 7-kilobases of DNA flanking the 5' end of the AFP gene were linked to a mouse major histocompatibility complex (MHC) class I structural gene. The fusion gene was stably integrated at different sites into mouse L-cells, which do not transcribe the AFP gene. Transient heterokaryon fusions demonstrated that the silent AFP-MHC gene and the endogenous AFP gene were activated by factors present in HepG2 cells, a liver-derived cell line, but not by those in HeLa cells. Activation was detected at the protein level in single heterokaryons by using monoclonal antibodies against the cell surface protein and at the mRNA level in populations of cells. The AFP promoter alone was sufficient for activation could be used for DNA transfer strategies to identify genes which can activate AFP promoter elements in trans.