The catabolism of retinoic acid (RA) is an essential mechanism for restricting the exposure of specific tissues and cells to RA. We recently reported the identification of a RA-inducible cytochrome P450 [P450RAI(CYP26)], in zebrafish, mouse, and human, which was shown to be responsible for RA catabolism. P450RAI exhibits a complex spatiotemporal pattern of expression during development and is highly inducible by exogenous RA treatment in certain tissues and cell lines. Sequence analysis of the proximal upstream region of the P450RAI promoter revealed a high degree of conservation between zebrafish, mouse, and human. This region of the promoter contains a canonical retinoic acid response element (5'-AGT-TCA-(n)5-AGTTCA-3'), embedded within a 32-bp region (designated R1), which is conserved among all three species. Electrophoretic mobility shift assays using this element demonstrated the specific binding of murine retinoic acid receptor-gamma (RARgamma) and retinoid X receptor-alpha (RXRalpha) proteins. Transient transfection experiments with the mouse P450RAI promoter fused to a luciferase reporter gene showed transcriptional activation in the presence of RA in HeLa, Cos-1, and F9 wild-type cells. This activation, as well as basal promoter activity, was abolished upon mutation of the RARE. Deletion and mutational analyses of the P450RAI promoter, as well as DNase I footprinting studies, revealed potential binding sites for several other proteins in conserved regions of the promoter. Also, two conserved 5'-TAAT-3' sequences flanking the RARE were investigated for their potential importance in P450RAI promoter activity. Moreover, these studies revealed an essential requirement for a G-rich element (designated GGRE), located just upstream of the RARE, for RA inducibility. This element was demonstrated to form complexes with Sp1 and Sp3 using nuclear extracts from either murine F9 or P19 cells. Together, these results indicate that the P450RAI-RARE is atypical in that conserved flanking sequences may play a very important role in regulating RA inducibility and expression of P450RAI(CYP26).