Modification of transcription factors would result in significant changes in the expression of related genes. Recently, the presence of transglutaminase (TGase) has been reported in nuclei, the biological significances of which have attracted a great concern. In this study, we tested the possibility that nuclear TGase would crosslink and regulate the activity of a glutamine-rich transcription factor Sp1. The addition of purified guinea pig liver TGase increased the binding activity of Sp1 to the target DNA sequence by gel electrophoretic mobility shift assay. The activity of the human p21WAF1 promoter containing six Sp1 binding sites was increased by the cotransfection of the TGase 2 gene, and two Sp1 sites at -82 and -69, relative to the transcription start site, were essential for the increased activity in human renal embryonic 293T cells. The activity of a minimal promoter containing three consensus Sp1 binding sites was increased by co-transfection of human TGase 2 gene. The amount of Sp1 protein was increased dramatically in TGase 2-transfected 293T cells and the Sp1 protein itself from HeLa cell nuclear extracts was crosslinked readily by purified TGase at 37 degrees C in the presence of Ca2+. These results suggest that the nuclear TGase might modulate the activity of the Sp1 transcription factor probably via the posttranslational or transcriptional modification of the factor by TGase.