HOX A genes are induced in a temporal fashion after retinoic acid (RA) treatment in non-N-ras-transformed PA-1 human teratcarcinoma cells. However, In N-ras-transformed PA-1 cells, RA-Induced expression of HOX A genes is delayed. The mRNA for the transcriptional activator AP-2 is overexpressed in these ras-transformed cells, but AP-2 transcriptional activity is inhibited relative to non ras-transformed PA-1 cells. Constitutive expression of AP-2 mimics the effect of ras by transforming cells and inhibiting differentiation in culture. We analyzed 4 kb of the human HOX A4 gene promoter and identified seven putative AP-2-binding sites in the DNA sequence. Transcription assays with variably sized HOX A4 promoter reporter constructs revealed that a 365 bp region of the promoter, -2950 to -3315 relative to the mRNA start, controls RA responsiveness and ras-mediated inhibition of HOX A4 activity. This region contains an AP-2 binding site and a RARE. Elimination of the AP-2 site by site-directed mutagenesis demonstrated that the AP-2 site is involved in RA-mediated transcriptional activation of the human HOX A4 promoter in combination with the RA receptor response element (RARE). In N-ras-transformed cells, low HOX A4 promoter activity results from ras inhibition of AP-2 transactivation.