A 16,000-dalton, high-mobility-group-like (HMG-like) DNA-binding protein, referred to as p16, has been purified to homogeneity from Novikoff hepatoma ascites cells. p16 binds specifically to a portion of the 5' flanking region of the rat rRNA gene (-620 to -417), which is part of the upstream activator sequence identified previously (B. G. Cassidy, H.-F. Yang-Yen, and L. I. Rothblum, Mol. Cell. Biol. 6:2766-2773, 1986). p16 also binds to a segment of the external transcribed spacer (+352 to +545). In vitro reconstituted transcription experiments demonstrated that the addition of p16 stimulated rRNA synthesis up to ca. fourfold. The stimulation was dose dependent and saturable. The effect of p16 on ribosomal gene transcription was also dependent on the presence of either the upstream or the downstream DNA-binding site, or both. The amino acid composition of p16 is very similar to that of HMG-I, suggesting that p16 may be a member of the HMG-I family of proteins. In this case, our results suggest that HMG proteins may play an important role in the regulation of the rRNA gene expression.