We report a cDNA clone prepared from adrenal chromaffin-derived PC12 cell RNA that encodes a novel ETS-domain factor, Pet-1. The deduced primary structure of Pet-1 is composed of 340 amino acids and the encoded polypeptide has a predicted molecular mass of 35.4 kD. The pattern of Pet-1 gene expression in the neonatal rat is highly restricted and suggests that Pet-1 functions primarily in the nervous system. Adrenal gland expresses the highest level of Pet-1 among the tissues examined. In situ hybridization indicates that Pet-1 is expressed in the adrenal medulla but not the adrenal cortex. Slightly weaker Pet-1 hybridization is detected in brain and low levels are detectable in intestine and eye. Pet-1 can bind specifically to a PEA3 ETS DNA-binding motif and can modulate transcription of synthetic promoter constructs in a sequence-specific manner. We recently identified a neural cell-type specific enhancer, beta43', within the 3'-untranslated exon of the neuronal nicotinic acetylcholine receptor (nAchR) beta4 subunit gene. Similar to Pet-1, the beta4 gene is also expressed in PC12 cells. The presence of putative ETS-domain binding sites in the beta43' enhancer led us to hypothesize that members of the ets gene family activate neuronal nAchR genes. Cotransfection assays show that Pet-1 can activate reporter gene transcription in a beta43' enhancer-dependent and cell type-dependent manner. Our results lead us to hypothesize that Pet-1 acts as a transcriptional regulator of downstream target genes involved in cholinergic neurotransmission.