Serum stimulation of quiescent fibroblasts results in a dramatic increase in c-fos transcription that peaks by 15 min and is then rapidly repressed to basal levels within 60 min. Using a nuclear run-on assay to follow directly the kinetics of transcription of mutant c-fos constructs, we demonstrate that the serum response element (SRE) is the site of regulation of both the induction and repression events. This is indicated by the ability of the SRE to mediate c-fos kinetics of induced transcription when fused to a heterologous gene and in the absence of a recognizable TATA element. Functions of the inner core and the outer palindromic arms of the SRE have been determined by mutagenesis. The 14-bp inner core binds the serum response factor (SRF) and is, itself, sufficient to mediate both the induction and shutoff of serum-stimulated transcription. Therefore, SRF and any other factors that regulate the transient kinetics of c-fos transcription require no more than these 14 nucleotides to function. The palindromic outer arms of the SRE stabilize the binding of SRF and thereby enhance the transcriptional response to serum. Autoregulation by the c-fos gene product is not affected by the direct interaction of Fos/Jun complexes with the c-fos promoter and is likely to be mediated by either a novel function of the Fos protein or by an effect of Fos on the expression of another gene.