Thrombospondin 1 (TSP1) transcription is stimulated by glucose, resulting in increased TGF-β activation and matrix protein synthesis. We previously showed that inducible expression of the catalytic domain of cGMP-dependent protein kinase (PKG) inhibits glucose-regulated TSP1 transcription and transforming growth factor (TGF)-β activity in stably transfected rat mesangial cells (RMCs(tr/cd)). However, the molecular mechanisms by which PKG represses glucose-regulated TSP1 transcription are unknown. Using a luciferase-promoter deletion assay, we now identify a single region of the human TSP1 promoter (-1172 to -878, relative to the transcription start site) that is responsive to glucose. Further characterization of this region identified an 18-bp sequence that specifically binds nuclear proteins from mesangial cells. Moreover, binding is significantly enhanced by high glucose treatment and is reduced by increased PKG activity. Gel mobility shift and supershift assays show that the nuclear proteins binding to the 18-bp sequence are USF1 and -2. USF1 and USF2 bound to the endogenous TSP1 promoter using a chromatin immunoprecipitation assay. Glucose stimulates nuclear USF2 protein accumulation through protein kinase C, p38 MAPK, and extracellular signal-regulated kinase pathways. Increased PKG activity down-regulates USF2 protein levels and its DNA binding activity under high glucose conditions, resulting in inhibition of glucose-induced TSP1 transcription and TGF-β activity. Overexpression of USF2 reversed the inhibitory effect of PKG on glucose-induced TSP1 gene transcription and TGF-β activity. Taken together these data present the first evidence that USF2 mediates glucose-induced TSP1 expression and TSP1-dependent TGF-β bioactivity in mesangial cells, suggesting that USF2 is an important transcriptional regulator of diabetic complications.