MCAM/MUC18 is a cell-surface glycoprotein of 113 kDa, originally identified as a melanoma antigen, whose expression is associated with tumor progression and the development of metastatic potential. We have previously shown that enforced expression of MCAM/MUC18 in primary cutaneous melanoma led to increased tumor growth and metastatic potential in nude mice. The mechanism for up-regulation of MCAM/MUC18 during melanoma progression is unknown. Here we show that up-regulation of MCAM/MUC18 expression in highly metastatic cells correlates with loss of expression of the transcription factor AP-2. The MCAM/MUC18 promoter contains four binding sites for AP-2, and electrophoretic mobility shift assay gels demonstrated that the AP-2 protein bound directly to the MCAM/MUC18 promoter. Transfection of AP-2 into highly metastatic A375SM melanoma cells (AP-2-negative and MCAM/MUC18-positive) inhibited MCAM/MUC18 promoter-driven chloramphenicol acetyltransferase reporter gene in a dose-dependent manner. MCAM/MUC18 mRNA and protein expression were down-regulated in AP-2-transfected but not in control cells. In addition, re-expression of AP-2 in A375SM cells inhibited their tumorigenicity and metastatic potential in nude mice. These results indicate that the expression of MCAM/MUC18 is regulated by AP-2 and that enforced AP-2 expression suppresses tumorigenicity and metastatic potential of human melanoma cells, possibly by down-regulating MCAM/MUC18 gene expression. Since AP-2 also regulates other genes that are involved in the progression of human melanoma such as c-KIT, E-cadherin, MMP-2, and p21(WAF-1), we propose that loss of AP-2 is a crucial event in the development of malignant melanoma.