A peroxisome proliferator-responsive element is located in the 5'-flanking region of the gene encoding rat hydratase-dehydrogenase, the second enzyme of the peroxisomal beta-oxidation pathway. DNase I footprint analysis with nuclear extracts from proliferator-responsive rat H4IIEC3 cells revealed two protected regions within the 196-base pair peroxisome proliferator-responsive element. Both regions contained multiple copies of a motif related to the consensus steroid hormone receptor binding half-site TGACCT, suggesting that peroxisome proliferator-dependent activation of this gene is mediated via peroxisome proliferator-activated receptors. Region II contains three TGACCT-like motifs in a direct repeat array. An oligonucleotide corresponding to this region was sufficient to confer responsiveness to the peroxisome proliferator ciprofibrate onto a heterologous promoter, as determined by transient transfection assays. Gel retardation assays demonstrated that nuclear factors bound to the hydratase-dehydrogenase oligonucleotide. Mutation of a single G residue within the second repeat motif abolished factor binding and consequently the ability of the element to respond to ciprofibrate, directly demonstrating that factor binding is necessary for peroxisome proliferator responsiveness. These results are discussed in the context of our current understanding of the mechanism of the coordinated transcriptional induction of the genes encoding peroxisomal beta-oxidation enzymes by peroxisome proliferators.