The pituitary peptide α-melanocyte-stimulating hormone (α-MSH) stimulates melanocytes to up-regulate cAMP, but the downstream targets of cAMP are not well understood mechanistically. One consequence of α-MSH stimulation is increased melanization attributable to induction of pigmentation enzymes, including tyrosinase, which catalyzes a rate-limiting step in melanin synthesis. The tyrosinase promoter is a principle target of the melanocyte transcription factor Microphthalmia (Mi), a factor for which deficiency in humans causes Waardenburg syndrome II. We show here that both α-MSH and forskolin, a drug that increases cAMP, stimulate a rapid increase in Mi mRNA and protein levels in both melanoma cell lines and primary melanocytes. This up-regulation requires a cAMP-responsive element within the Mi promoter, and the pathway leading to Mi stimulation is subject to tight homeostatic regulation. Although cAMP signaling is ubiquitous, the Mi promoter was seen to be cAMP-responsive in melanocytes but not in non- melanocytes. Moreover, dominant negative interference with Mi impeded successful α-MSH stimulation of tyrosinase. The regulation of Mi expression via α-MSH thus provides a direct mechanistic link to pigmentation. In addition, because the human melanocyte and deafness condition Waardenburg syndrome is sometimes caused by haploinsufficiency of Mi, its modulation by α-MSH suggests therapeutic strategies targeted at up-regulating the remaining wild type Mi allele.