The minimal DNA sequence required for glucocorticoid induction of the phosphoenolpyruvate carboxykinase (PEPCK) gene in H4IIE rat hepatoma cells was defined. This novel glucocorticoid response unit (GRU) spans about 110 base pairs (bp) and includes two receptor-binding elements plus two accessory factor-binding elements. Purified glucocorticoid receptor bound to two regions (GR1 and GR2) between -395 and -349 bp relative to the transcription start site. Factors in crude rat liver nuclear extract bound to DNA in the regions -455 to -431 and -420 to -403 bp, which are designated accessory factor 1 (AF1) and accessory factor 2 (AF2) elements, respectively. Gel retardation analysis revealed that at least two proteins bound to AF1 and that they were distinct from the protein(s) that bound to AF2. Various combinations of GR1, GR2, AF1, and AF2 were fused to the chloramphenicol acetyltransferase (CAT) reporter gene and cotransfected with a glucocorticoid receptor expression plasmid (pSVGR1) into H4IIE cells to identify the functional GRU. Neither the glucocorticoid receptor binding region nor the accessory factor binding region alone was sufficient to confer glucocorticoid responsiveness. The two components of the glucocorticoid receptor binding region functioned independently, and each accounted for half of the maximal response, provided the accessory factor elements were present. Similarly, deletion of either AF1 or AF2 diminished glucocorticoid induction of the PEPCK gene to approximately half of the maximum. We propose that the complex PEPCK gene GRU provides the stringent regulation required of this critical enzyme in liver.