The core promoter of the human DNA beta-polymerase (beta-pol) gene is regulated by proteins binding at 3 GC boxes and the single activating transcription factor/cAMP response element (ATF/CRE) centered at -45; the central 8 residues of this ATF/CRE match the ATF/CRE consensus sequence, TGACGTCA. Previously, we purified a beta-pol promoter ATF/CRE-binding protein (named palindrome-binding protein or PBP) from bovine testes and found that this protein is a beta-pol promoter transcriptional activator in vitro using a HeLa nuclear extract transcription system (Widen, S. G., and Wilson, S. H. (1991) Biochemistry 30, 6296-6305). In this study, we determined the mechanism of in vitro transcriptional activation by this purified PBP. We used a PBP-depleted HeLa nuclear extract transcription system with an artificial promoter containing a solitary activator element corresponding to the entire 22-nucleotide beta-pol promoter ATF/CRE-binding site. Kinetic analyses of the 180-nucleotide run-off product formation indicated that stimulation of transcriptional activity by PBP was due entirely to an increase in the rate constant for promoter clearance. Thus, under our conditions, the purified PBP had no effect on the rate of closed preinitiation complex formation or for the closed complex to open complex transition. Instead, the rate of productive initiation leading to the 180-nucleotide transcript was stimulated by PBP. We found that the rate of closed preinitiation complex formation was not in rapid equilibrium with promoter and RNA polymerase II, in contrast to the model with prokaryotic RNA polymerase transcription. The results also indicated that PBP binding to the ATF/CRE is required for the stimulation of promoter clearance. These studies define the kinetic mechanism of a purified ATF/CRE-binding protein in stimulation of the in vitro transcription of a designed mammalian promoter.