The CRES (cystatin-related epididymal spermatogenic) protein defines a new subgroup in the family 2 cystatins of the cystatin superfamily of cysteine protease inhibitors. However, unlike the ubiquitous expression of cystatin C, the Cres gene is preferentialy expressed in postmeiotic germ cells, the proximal caput epididymidis, and anterior pituitary gonadotrophs. Furthermore, CRES protein lacks two of the three consensus sites necessary for the cystatin inhibition of C1 cysteine proteases. Therefore, CRES may perform unique and tissue-specific functions in the reproductive and neuroendocrine systems. In the present review, we describe our studies on: 1. the Cres gene promoter and the transcriptional regulatory protein and their associated DNA binding sites that may be important for tissue-specific expression; and 2. the biochemical function of CRES protein. In brief, Northern blot, gel shift analyses, and transient transfection assays demonstrated that the C/EBP beta (CCAAT/enhancer binding protein) transcription factor is the predominant C/EBP family member expressed in the epididymis and gonadotroph cells and is necessary for high levels of Cres expression in these two tissues. In other studies, analyses of transgenic mice expressing a CAT reporter gene driven by 1.6 kb of Cres promoter revealed CAT mRNA and protein only in the germ cells. These studies suggest that the 1.6 kb of Cres 5' flanking sequence contains the required DNA elements for expression in the testis, but lacks the elements to correctly _target expression of the reporter gene in the epididymis. Alternatively, repressor elements may be present. Finally, in vitro protease assays were performed to determine if CRES functions as a protease inhibitor. In contrast to cystain C, CRES did not inhibit the C1 cysteine protease papain but rather inhibited at nanomolar concentrations the serine protease PC2, a prohormone processing enzyme. Therefore, CRES is a new cross-class inhibitor that may regulate PC2 of PC2-like proteases and suggests a role for CRES in the regulation of prohormone and proprotein processing.