The enzymatic activity of firefly luciferase provides a sensitive, rapid means to assay transcriptional activity of regulated activation sequences of DNA when fused to the protein coding sequence of the luciferase gene. We have developed several modifications of the luciferase assay and have characterized certain parameters of the assay, resulting in optimization of conditions for the preparation and storage of cell lysates and establishment of substrate concentrations. These findings should be useful to investigators interested in applying the luciferase assay to studies of the transcriptional activity of test DNAs incorporating the luciferase reporter.