How is a gene turned on in one cell type, and not in another? It depends primarily on whether the transcription factor for the gene's enhancer is active or not in a cell. To illustrate this, let's consider two different genes - one is regulated by enhancer A (shown below in red), which is recognized by transcription factor A, and the other gene is regulated by enhancer B (shown below in blue), which is recognized by transcription factor B. In one cell type (let's say muscle, for the sake of argument), transcription factor A might be active whereas transcription factor B might not. In such a cell, only the first gene would be transcribed:

In another cell type (e.g. epidermis), transcription factor B would be active, and transcription factor A would not. In this cell, only the second gene would be transcribed:

So how is it determined which transcription factors are active in which cell types? The answer to this question is very complicated, and not completely understood. However, there are a number of mechanisms by which transcription factors can be regulated:

• Often, the presence or absence of a transcription factor in a cell is the determining step. If the factor is present, the gene is transcribed. If not, then the gene is not transcribed. The presence of a transcription factor, of course, depends upon the activity of the gene encoding that transcription factor, which forces us to ask how the gene encoding the transcription factor is regulated, which pretty much brings us back to where we began.
• Transcription factors can be activated by environmental signals. For example, virtually all organisms have a set of genes called heat shock genes that encode proteins that help the organism survive heat stress. These genes are activated under conditions of heat stress, under the control of a transcription factor called heat shock transcription factor. This factor is always present, but is only activated when greatly increased temperatures are detected.
• Transcription factors can be activated by signals from other cells in the same organism. Such signals include hormones and growth factors. Hormones must bind to a specific receptor on the target cell, and the receptor mediates the cellular effects of the signal. There are two basic mechanisms used, one for steroid hormones, and one for peptide hormones:
  • Steroid hormones are lipid (actually cholesterol) derivatives, such as testosterone and progesterone. These hormones can cross the cytoplasmic membrane into a cell, where they bind to their specific receptor. Steroid receptors are transcription factors, and when they bind to their ligand, they become activated and initiate transcription of a specific set of genes.
  • Peptide hormones cannot cross the cytoplasmic membrane, and so must bind to a receptor on the cell surface. When bound to its ligand, these receptors initiate a series of biochemical reactions inside the cell, with the ultimate result being the activation of a transcription factor (often by phosphorylation of the transcription factor), which initiates transcription of a specific set of genes.