The transcription of the progesterone receptor gene is induced by estrogens and decreased by progestins. Studies were performed to define the regions of the gene and the molecular mechanisms involved. No hormonal regulation could be observed using 5' flanking regions of the gene up to -2762 in front of a heterologous gene. Estrogen and progestin regulation could be observed only when using fragments of the gene extending down to +788. Progressive deletions from the 5' and 3' ends, site-directed mutagenesis and DNase protection experiments with purified estrogen receptor suggested that the biologically active estrogen responsive element (ERE) is present at +698/+723, overlapping the initiation of translation. An oligonucleotide was synthesized bearing this ERE and shown to impart estrogen inducibility to a heterologous gene. Its regulation by anti-estrogens corresponded to that of the in situ progesterone receptor gene since tamoxifen was a partial agonist whereas ICI 164384 was a full antagonist. This ERE also mediated down-regulation by progestins in the presence of the progesterone receptor, even though it has no progesterone receptor binding ability. DNase footprinting showed that this effect was not due to a decrease of estrogen receptor affinity for the ERE in the presence of progesterone receptor. Finally, use of deletion mutants of the progesterone receptor showed that the steroid binding and the DNA binding domains were necessary for down-regulation whereas deletions of various parts of the N-terminal domain were without effect.