Expression of retinoic acid receptor beta (RARbeta) is spatially and temporally restricted during embryonal development. Also during retinoic acid (RA)-dependent embryonal carcinoma (EC) cell differentiation, RARbeta expression is initially up-regulated, while in later phases of differentiation expression is down-regulated, by an unknown mechanism. To gain insight into the regulation of RARbeta, we studied the activity of the RARbeta2 promoter and mutants thereof in various cell lines. While the RARbeta2 promoter is activated by RA in a limited number of cell lines, synthetic RA-responsive reporters are activated in most cell types. We show that the expression levels of proteins that bind to the beta-retinoic acid response element (RAR/retinoid X receptors and orphan receptors) and also the differential expression of a number of coactivators modulate the RA response on both natural and synthetic reporters. We further show that cell type-specific activation of the RARbeta2 promoter is dependent on the promoter architecture including the spacing between retinoic acid response element and TATA-box and initiator sequence (betaINR). Mutation within these regions caused a decrease in the activity of this promoter in responsive EC cells, while an increase in activity in non-EC cell lines was observed. Cell-specific complexes were formed on the betaINR, suggesting that the betaINR contributes to cell-specific activation of the promoter. On this basis we propose that promoter context-dependent and more general RA response-determining mechanisms contribute to cell-specific RA-dependent activation of transcription.