We have previously shown that retinoic acid (RA) induces differentiation in an osteoblastic cell line derived from embryonic rat calvaria and that RA has selective effects on zif268 gene expression in these preosteoblastic cells,distinct from those in more mature osteoblasts. In this study we demonstrate that the RA-dependent transcriptional increase in zif268 gene expression is mediated by the interaction of RA receptors (RARs) with a 17 base pair sequence in the zif268 promoter containing a single half-site motif (GTTCA), identical to each of the direct repeats seen in the RAR beta 2 gene. The sequence appears relatively RA-specific, since the zif268 RA-responsive element is not activated by 1,25-dihydroxyvitamin D3 or thyroid hormone (T3). However, cotransfection of RAR expression vectors and an SV-40 promoter chloramphenicol acetyltransferase (CAT) construct containing the single zif268 RA-responsive motif into CV-1 cells demonstrates that the alpha-, beta-, and gamma-RARs transactivate through this element. Extensive mutagenesis of the zif268 promoter region containing the RA response element (RARE) motif confirms that the transactivation and nuclear protein binding activity of this region requires only the half-site motif. The direct involvement of RAR in this DNA-protein interaction has been demonstrated by competitive gel retardation analysis using consensus RAREs and super-shifting of the DNA-protein complex with mouse alpha- or gamma-RAR monoclonal antibodies. In addition, we found that cell-specific suppression of RA-stimulated zif268 gene expression can be attributed to a 29 base pair nucleotide sequence, located downstream of the RA-responsive region in the zif268 gene. This sequence appears to be bound specifically by nuclear protein(s) from several cell types, including osteoblasts. The presence of this sequence in cis to the zif268 RARE or the consensus beta RARE completely blocks the RA-responsiveness of the zif268 gene in differentiated osteoblasts. These data extend the broad spectrum of RA-responsive sequences necessary for DNA binding and transactivation to include regulation via single RARE half-site motifs and suggest that the lack of RA responsiveness in differentiated osteoblasts may be mediated by cell-specific suppression of gene expression.