Retinoids are known to have profound effects on cellular differentiation and embryo pattern formation. In the adult organism, retinoid acid (RA) receptors are present in a large variety of tissues, including brain. However, little is known of the precise roles of RA at these different sites. In the present study we have identified a novel potential target of RA action by identifying an RA response element (RARE) in the human oxytocin (OT) gene promoter. We have used DNA-mediated gene transfer techniques to introduce various portions of the OT 5'-flanking sequences next to the chloramphenicol acetyltransferase (CAT) gene in neuroblastoma cells. RA elicited a marked stimulation of the transcriptional activity of the OT promoter in cells cotransfected with either the human RA receptor alpha, beta, or gamma. In cells cotransfected with the RA receptor alpha, the ED50 of this response was 5 x 10(-10) M. The RA response could also be conferred to a heterologous promoter independent of orientation. 5'-Deletions as well as site-directed mutations demonstrated that four TGACC motifs, located at -162, -156, -103, and -83 in the OT promoter, are necessary for optimal RA induction. Mutation or deletion of any of these elements reduces significantly the RA response. Interestingly, the first two TGACC motifs overlap with the estrogen response element that we have previously characterized in this gene. Furthermore, the TGACC motif located at -83 overlaps with the CCAAT box. We further demonstrate that in neuroblastoma cells transfected with an RAR alpha expression vector expression of the endogenous OT gene is stimulated greater than 4-fold in response to RA. Our studies constitute the first report of a RARE in a neuropeptide gene and define a mechanism by which OT gene expression can be modulated by retinoic acid.