Plasmid clones containing a human Alu family repeat can be transcribed efficiently by RNA polymerase III in HeLa cell extract. This generated three RNA species, all of which initiated from the first base (+1) of the repeat. By studying the transcriptional properties of deletion clones, subclones, and topologically different DNA templates, we demonstrated that: supercoiled DNA templates are transcribed 3- to 5-fold more efficiently than are linear or nicked circular DNA molecules; a contiguous DNA helix in the transcription complexes that extends into the 5' flanking region of positions -30 to -85 is absolutely required for initiation to occur (this interaction does not involve recognition of specific DNA sequences); and similar to the adenovirus VAI RNA and tRNA genes, the Alu repeat 3' to the alpha 1-globin gene (designated 3'-alpha 1 Alu) contains a split intragenic promoter: an anterior element (positions +4 to +37) and a posterior element (positions +70 to +82). However, the promoter of the Alu repeat functions in distinctive ways in comparison to those of other RNA polymerase III-dependent genes. The posterior promoter element alone is sufficient and necessary for an accurate initiation to occur. The presence of the anterior promoter element, which by itself does not initiate transcription, enhances the transcriptional efficiency by a factor of 10- to 20-fold. Furthermore, the distance between the initiation sites and the posterior promoter element, but not the anterior promoter element, remains constant. These results suggest that the promoter of this Alu family repeat consists of at least two functionally different domains: a "directing element" (the posterior promoter element) that determines the accuracy of initiation and an "enhancing element" (the anterior promoter element) that is mainly responsible for the transcriptional efficiency.