The liver is equipped with a repertoire of enzymatic activities essential for executing its specialized role in metabolism, the expression of which is regulated during development. The liver-specific phenotype is the consequence of a developmental tissue-specific program of gene expression. Sequences close to many characterized structural liver-specific genes (cis-regulatory elements) regulate their transcription. Identification of such cis-regulatory elements, capable of conferring a hepatocyte-specific gene expression, has been achieved by the introduction of chimeric genes into germ lines, producing transgenic animals, into differentiated cultured cells and into a cell-free transcription system. Such cis-elements in the DNA are recognized by specific DNA-binding nuclear proteins (trans-acting factors) which are liver-enriched and developmentally controlled. The interaction of defined cis-acting elements, near liver-specific genes, with liver-specific trans-acting factors might result in the differentiation of cells of the endoderm lineage into hepatocyte cells.