We have studied the interactions of the Sp1 and IID transcription factors with a simple RNA polymerase II promoter. The adenovirus E1B core promoter consists essentially of a GC box and a TATA box, binding sites for the Sp1 and IID transcription factors, respectively. The E1B promoter is accurately transcribed in vitro using a mammalian transcription system. Sp1 activates E1B transcription in vitro in reactions using IID factor isolated from either human or yeast cells. In DNase I footprinting studies, Sp1 bound rapidly to its recognition sequence even at 0 degrees C (t1/2 less than 1 min). In contrast, yeast IID bound more slowly (t1/2 approximately 6 min at 25 degrees C) and required thermal energy for stable binding to the TATA box sequence. Dissociation rates were measured by the addition of specific oligonucleotide competitors to preformed DNA-protein complexes. Sp1 dissociates rapidly (t1/2 less than 1 min) at 25 degrees C, while yeast IID dissociates with an estimated t1/2 of 1 h at 25 degrees C. Sp1 and yeast IID bound to the E1B promoter simultaneously but independently. The rates of binding and dissociation of these factors were not significantly affected by the presence of the other factor. Bound Sp1 factor did not alter or enhance the yeast IID footprint. Oligonucleotide challenge of in vitro transcription reactions indicated that Sp1 also did not enhance the binding of the human IID factor to the E1B promoter. Thus the Sp1 factor activates transcription of the E1B gene by a mechanism that does not enhance the DNA-binding activity of the IID factor. Sp1 factor activates E1B transcription by 5- to 10-fold in vitro. Under these in vitro transcription conditions, transcripts due to reinitiation from an individual promoter complex contribute only a small portion of the total yield of E1B transcripts. Thus Sp1 cannot activate transcription by increasing the rate of initiation events per complex. Instead it appears that Sp1 acts by increasing the number of productive transcription complexes formed in vitro.