CD14 is a pattern recognition receptor that plays a central role in innate immunity through recognition of bacterial lipoglycans, primarily LPS. Recently, our group has identified a common single nucleotide polymorphism, -159C-->T, in the CD14 proximal promoter. Homozygous carriers of the T allele have a significant increase in soluble CD14, but a decreased total serum IgE. This epidemiologic evidence led us to investigate the molecular basis for the effects of CD14/-159C-->T on CD14 regulation in monocytes and hepatocytes, the two major cell types known to express this gene in vivo. EMSA analysis showed that the T allele results in decreased affinity of DNA/protein interactions at a GC box that contains a binding site for Sp1, Sp2, and Sp3 transcription factors. In reporter assays, the transcriptional activity of the T allele was increased in monocytic Mono Mac 6 cells, which express low levels of Sp3, a member of the Sp family with inhibitory potential relative to activating Sp1 and Sp2. By contrast, both alleles were transcribed equivalently in Sp3-rich hepatocytic HepG2 cells. Our data indicate that the interplay between CD14 promoter affinity and the [Sp3]:[Sp1 + Sp2] ratio plays a critical mechanistic role in regulating transcription of the two CD14 alleles. Variation in a key gene of innate immunity may be important for the pathogenesis of allergy and inflammatory disease through gene-by-gene and/or gene-by-environment interactions.