The Oct-3/4 gene product, which belongs to the POU family of transcription factors, is a good candidate for regulating initial differentiation decisions. It is expressed in the earliest stages of embryogenesis and repressed in subsequent stages. Retinoic acid (RA)-induced differentiation of embryonal carcinoma (EC) cells is accompanied by decreased expression of the Oct-3/4 gene. Previous findings show that sequences in the Oct-3/4 enhancer region (designated RARE1) are targets for RA-mediated repression (H. Okazawa, K. Okamoto, F. Ishino, T. Ishino-Kaneko, S. Takeda, Y. Toyoda, M. Muramatsu, and H. Hamada, EMBO J. 10:2997-3005, 1991). Our present results demonstrate conclusively that the TATA-less Oct-3/4 promoter is also a target for RA- induced repression. We identified a novel cis element in the Oct-3/4 promoter that harbors a putative Sp1 binding site and a RA-responsive element (designated RAREoct), which are juxtaposed to one another. Protein binding to the Sp1 site is independent of protein binding to the RAREoct sequence. Unlike the RARE1 situated in the Oct-3/4 enhancer which does not contain a typical RAR recognition site, the RAREoct identified in this study consists of three directly repeated motifs that exhibit extensive homology to RARE sequences located in RA-responsive genes. Moreover, the RAREoct shows different DNA-binding characteristics and DNase I footprint patterns with nuclear proteins isolated from undifferentiated versus RA-differentiated EC cells. This suggests that the RAREoct element binds different nuclear proteins in RA-treated and untreated EC cells which most probably belong to the RA receptor, retinoid X receptor, or orphan receptor families of transcription factors. Using site-directed mutagenesis, we show that the RAREoct contributes to the transcriptional activation of Oct-3/4 promoter in P19 cells and, most interestingly, mediates the RA-induced repression in RA- differentiated EC cells. Thus, the RAREoct element could be one of the points of integration of several signalling pathways influencing Oct-3/4 expression. In accordance with the suggestion that suppression of Oct-3/4 expression is a crucial step during embryogenesis, the Oct-3/4 upstream region contains multiple targets for RA-induced repression, probably to ensure accurate and prompt repression of Oct-3/4 expression. It is possible that these repressors are differentially used at specific stages of development in response to various signals.