The gene encoding cytochrome P-450 4A6 (CYP4A6) is transcriptionally activated by peroxisome proliferators. This response is dependent on a strong enhancer element (Z) and weaker elements (X and -27). The peroxisome proliferator response is mediated by the binding of heterodimers containing the peroxisome proliferator-activated receptor α (PPARα) and the retinoid X receptor α (RXRα) to these elements. These peroxisome proliferator response elements (PPREs) contain imperfect direct repeats of the nuclear receptor consensus recognition sequence with a spacing of one nucleotide (DR1) (AGGTCA N AGGTCA). This DR1 motif is seen in the binding sites for other nuclear receptor complexes, such as ARP-1, HNF-4, and RXRα homodimers. Mutational analysis of the Z element reveals that the DR1 motif is required for the transcriptional activation of the CYP4A6 gene by peroxisome proliferators; however, deletion of sequences immediately upstream of this motif also abolishes this response. Oligonucleotides corresponding to truncated and mutated Z elements were assayed by gel retardation for binding to RXRα, PPARα, and ARP-1. Deletions or mutations within six nucleotides 5' of the DR1 motif dramatically diminish PPARα · RXRα binding without reducing the binding of either RXRα or ARP-1 homodimers, whereas mutation or deletion of the core DR1 sequences abolishes the binding of PPARα · RXRα heterodimers and of RXRα or ARP-1 homodimers. Thus, the DR1 motif in the Z element is not sufficient to constitute a PPRE. Moreover, the binding of PPARα · RXRα to the Z element requires sequences immediately 5' of the DR1. These sequences are conserved in natural PPREs and promote binding of PPARα · RXRα heterodimers in preference to potential competitors such as ARP-1 and RXRα.