In the present study we present evidence for the critical role of Sp1 in the mechanism of transactivation of the human cell cycle inhibitor p21^WAF-1/Cip1 (p21) gene promoter by the tumor suppressor p53 protein. We found that the distal p53 binding site of the p21 promoter acts as an enhancer on the homologous or heterologous promoters in hepatoma HepG2 cells. In transfection experiments, p53 transactivated the p21 promoter in HaCaT cells that express Sp1 but have a mutated p53 form. In contrast, p53 could not transactivate the p21 promoter in the Drosophila embryo-derived Schneider's SL2 cells that lack endogenous Sp1 or related factors. Cotransfection of SL2 cells with p53 and Sp1 resulted in a synergistic transactivation of the p21 promoter. Synergistic transactivation was greatly decreased in SL2 cells and HaCaT cells by mutations in either the p53 binding site or in the -82/-77 Sp1 binding site indicating functional cooperation between Sp1 and p53 in the transactivation of the p21 promoter. Synergistic transactivation was also decreased by mutations in the transactivation domain of p53. Physical interactions between Sp1 and p53 proteins were established by GST pull down and co-immunoprecipitation assays. Using deletion mutants we found that the DNA binding domain of Sp1 is required for its physical interaction with p53. In conclusion, Sp1 must play a critical role in regulating important biological processes controlled by p53 via p21 gene activation such as DNA repair, cell growth, differentiation and apoptosis.