Gene regulation by imposed localization was studied by using designed zinc finger proteins that bind 18-bp DNA sequences in the 5' untranslated regions of the protooncogenes erbB-2 and erbB-3. Transcription factors were generated by fusion of the DNA-binding proteins to repression or activation domains. When introduced into cells these transcription factors acted as dominant repressors or activators of, respectively, endogenous erbB-2 or erbB-3 gene expression. Significantly, imposed regulation of the two genes was highly specific, despite the fact that the transcription factor binding sites targeted in erbB-2 and erbB-3 share 15 of 18 nucleotides. Regulation of erbB-2 gene expression was observed in cells derived from several species that conserve the DNA target sequence. Repression of erbB-2 in SKBR3 breast cancer cells inhibited cell-cycle progression by inducing a G(1) accumulation, suggesting the potential of designed transcription factors for cancer gene therapy. These results demonstrate the willful up- and down-regulation of endogenous genes, and provide an additional means to alter biological systems.