Basal transcription of the bone sialoprotein (BSP) gene is mediated by highly-conserved inverted CCAAT (ICE; ATTGG) and TATA (TTTATA) elements separated by precisely 21 nucleotides. Here we studied the importance of the relative position and orientation of the CCAAT and TATA elements in the proximal promoter by measuring the transcriptional activity of a series of mutated reporter constructs in transient transfection assays. Whereas inverting the TTTATA (wild-type) to a TATAAA (consensus TATA) sequence increased transcription slightly, transcription was reduced when the flanking di-nucleotides were also inverted. In contrast, reversing the ATTGG (wild-type; ICE) to a CCAAT (RICE) sequence caused a marked reduction in transcription, while both transcription and NF-Y binding were progressively increased with the simultaneous inversion of flanking nucleotides (f-RICE-f). Reducing the distance between the ICE and TATA elements produced cyclical changes in transcriptional activity that correlated with progressive alterations in the relative positions of the CCAAT and TATA elements on the face of the DNA helix. Minimal transcription was observed after 5 nucleotides were deleted (equivalent to a ~one-half turn of the helix) while transcription was fully restored after deleting 10 nucleotides (~one turn of the DNA helix); transcriptional activity being progressively lost with deletions beyond 10 nucleotides. In comparison, when deletions were made with the ICE in the reversed (f-RICE-f) orientation transcriptional activity was progressively lost with no recovery. These results show that, while transcription can still occur when the CCAAT-box is reversed and/or displaced relative to the TATA-box, the activity is dependent upon the flexibility of the intervening DNA helix needed to align the NF-Y complex on the CCAAT box with PIC complex proteins that bind to the TATA-box. Thus, the precise location and orientation of the CCAAT element is necessary for optimizing basal transcription of the BSP gene.