Peroxisome proliferator-activated receptor (PPARs) are members of the nuclear receptor superfamily. For transcriptional activation of their target genes, PPARs heterodimerize with the retinoid-X receptor (RXR). The convergence of the PPAR and RXR signaling pathways has been shown to have an important function in lipid metabolism. The promoter of the gene encoding the acyl-coenzyme-A oxidase (ACO), the rate-limiting enzyme in peroxisomal beta-oxidation of fatty acids, is a target site of PPAR action. In this study, we examined the role and the contribution of both cis-and trans-acting factors in the transcriptional regulation of this gene using transient transfections in insect cells. We identified several functional cis-acting elements present in the promoter of the ACO gene and established that PPAR-dependent as well as PPAR-independent mechanisms can activate the ACO promoter in these cells. We show that the PPAR/RXR heterodimer exerts its effect through two response elements within the ACO promoter, in synergy with the transcription factor Sp1 via five Sp1-binding sites. Furthermore, this functional interaction also occurs when Sp1 is co-expressed with PPAR or RXR alone, indicating that activation can occur independently of PPAR/RXR heterodimers.