The enhancer element present in the 5' proximal region flanking the mouse alpha-foetoprotein (AFP) gene, active in AFP-producing hepatoma cells and inactive in non-producing hepatoma cells, was localized between positions -203 and -79. This enhancer segment contains a sequence resembling the steroid hormone response element. We demonstrated that this sequence is dispensable for the enhancer activity but mediates dose-dependent effects of dexamethasone on the enhancer activity: dexamethasone decreases the proximal enhancer activity at low concentrations but this inhibitory effect vanishes at high concentrations. Our results indicate that several transcriptional factors, one of which is absent in AFP-non-producing hepatoma cells, control the AFP proximal enhancer activity.