Expression of fetal gamma-globin genes in individuals with the deletion forms of hereditary persistence of fetal hemoglobin (HPFH) has been attributed either to enhancement by 3' regulatory elements juxtaposed to gamma-globin genes or to deletion of gamma-gene silencers normally residing within the beta-globin gene cluster. In the present study, we tested the hypothesis of imported enhancers downstream of beta-globin gene using the HPFH-3 deletion as a model. The abnormal bridging fragment of 13.6 kilobases (kb) containing the A gamma-gene with its flanking sequences and 6.2 kb of the juxtaposed region was microinjected into fertilized mouse eggs. Twelve transgenic mice positive for the fragment were generated. Samples from 11.5-day yolk sacs, 16-day fetal liver, and adult blood were analyzed for A gamma-mRNA using RNase protection assays. Three mice lacked A gamma expression in the yolk sac indicating non-optimal integration site. Four expressed A gamma-mRNA at the embryonic stage only, while two expressed A gamma-mRNA in both embryonic and fetal liver erythroid cells. Since the A gamma-gene with its normal flanking sequences and in the absence of the locus control region is expressed only in embryonic cells of transgenic mice, these data suggest that the juxtaposed sequences have altered the developmental specificity of the fetal gamma-globin gene. These sequences were further tested for the presence of an enhancer element, by their ability to activate a fusion reporter gene consisting of the CAT gene linked to the gamma-globin gene promoter, in erythroid (K562) and non-erythroid (HeLa) cells. A 0.7-kb region located immediately 3' to the breakpoint, enhanced chloramphenicol acetyltransferase activity by 3-fold in erythroid cells. The enhancer also activated the embryonic epsilon-globin gene promoter by 2-fold but not the adult beta- or delta-globin gene promoters. The enhancer represents a region of previously known complex tandem repeats; in this study we have completed the sequencing of the region encompassing the 0.7-kb enhancer element. Multiple areas of the enhancer region exhibit homology to the core element of the simian virus 40 enhancer and to the sequences of the human 3' A gamma- and the chicken 3' beta-globin enhancers. A consensus binding site for the erythroid specific GATA-1 transcription factor and seven consensus sites for the ubiquitous CP1 transcription factor are also included within the enhancer. These data suggest that these sequences located immediately 3' to the breakpoint of the HPFH-3 deletion, exhibit both the structure and the function of an enhancer, and can modify the developmental specificity of the fetal gamma-globin genes, resulting in their continued expression during adult life.