The present work has examined the effects of okadaic acid, an inhibitor of serine/threonine protein phosphatases, PP-1 and PP-2A, on the regulation of EGR-1 gene expression in normal peripheral blood T- and Jurkat cells. The results demonstrate that okadaic acid treatment is associated with a transient induction of EGR-1 gene expression which was detectable by 30 min to 1 h and peaked at 3–6 h. EGR-1 mRNA was superinduced in cells treated with both okadaic acid and the protein synthesis inhibitor cycloheximide. The half-life of EGR-1 mRNA was similar in both control and okadaic acid-treated cells. In contrast, treatment with both okadaic acid and cycloheximide prolonged the half-life of EGR-1 transcripts. Nuclear run-on assays demonstrated that induction of EGR-1 gene expression by okadaic acid is controlled at least in part by a transcriptional mechanism. Transient expression assays with EGR-1 promotor fragments linked to the chloramphenicol acetyltransferase gene demonstrate that okadaic acid-induced EGR-1 transcription is conferred by the 5′ most distal CArG box, CC (AT)₆GG, in the EGR-1 promoter. Moreover, chloramphenicol acetyltransferase activity was induced by okadaic acid when the 5′ most distal CArG element was linked to the heterologous herpes simplex virus thymidine kinase promoter, and not induced with a similar heterologous construct containing a mutated CArG sequence. These studies demonstrate that okadaic acid regulates EGR-1 gene expression at the transcriptional level via the CArG element and suggest that PP-1 and PP-2A play a role in T-cell activation.