The gene encoding cytochrome P-450 4A6 (CYP4A6) is transcriptionally activated by peroxisome proliferators. This response is dependent on a strong enhancer element (Z) and weaker elements (X and -27). The peroxisome proliferator response is mediated by the binding of heterodimers containing the peroxisome proliferator-activated receptor alpha (PPAR alpha) and the retinoid X receptor alpha (RXR alpha) to these elements. These peroxisome proliferator response elements (PPREs) contain imperfect direct repeats of the nuclear receptor consensus recognition sequence with a spacing of one nucleotide (DR1) (AGGTCA N AGGTCA). This DR1 motif is seen in the binding sites for other nuclear receptor complexes, such as ARP-1, HNF-4, and RXR alpha homodimers. Mutational analysis of the Z element reveals that the DR1 motif is required for the transcriptional activation of the CYP4A6 gene by peroxisome proliferators; however, deletion of sequences immediately upstream of this motif also abolishes this response. Oligonucleotides corresponding to truncated and mutated Z elements were assayed by gel retardation for binding to RXR alpha, PPAR alpha, and ARP-1. Deletions or mutations within six nucleotides 5' of the DR1 motif dramatically diminish PPAR alpha.RXR alpha binding without reducing the binding of either RXR alpha or ARP-1 homodimers, whereas mutation or deletion of the core DR1 sequences abolishes the binding of PPAR alpha.RXR alpha heterodimers and of RXR alpha or ARP-1 homodimers. Thus, the DR1 motif in the Z element is not sufficient to constitute a PPRE. Moreover, the binding of PPAR alpha.RXR alpha to the Z element requires sequences immediately 5' of the DR1. These sequences are conserved in natural PPREs and promote binding of PPAR alpha.RXR alpha heterodimers in preference to potential competitors such as ARP-1 and RXR alpha.