In addition to the glucocorticoid receptor, DNA-binding proteins called accessory factors play a role in hormone activation of many glucocorticoid-responsive genes. Hormonal regulation of the ␥-fibrinogen subunit gene from the frog Xenopus laevis requires a novel DNA sequence that binds a liver nuclear protein called Xenopus glucocorticoid receptor accessory factor (XGRAF). Here we demonstrate that the recognition site for XGRAF encompasses GAGTTAA at positions ؊175 to ؊169 relative to the start site of transcription. This sequence is not closely related to the binding sites for known transcription factors. The two guanosines make close contact with XGRAF, as shown by the methylation interference assay. Single-point mutagenesis of every nucleotide in the 9-base pair region from positions ؊177 to ؊169 showed an excellent correlation between ability to bind XGRAF in vitro and ability to amplify hormoneinduced transcription from DNA transfected into Xenopus primary hepatocytes. Conversely, XGRAF had little or no effect on basal transcription of the ␥-fibrinogen gene. Maximal hormonal induction also requires three half-glucocorticoid response elements (half-GREs) homologous to the downstream half of the consensus GRE. Interestingly, the XGRAF-binding site is immediately adjacent to the most important half-GRE. This close proximity suggests a new mechanism for activation of a gene lacking a conventional full GRE.Steroid hormones, which include glucocorticoids and mineralocorticoids from the adrenal cortex and estrogens, progestins, and androgens from the gonads, regulate a vast array of physiological processes that are essential for development, differentiation, growth, metabolism, homeostasis, behavior, and reproduction in vertebrate organisms. In the classical model of steroid hormone action (1), the steroid ligands bind to specific intracellular protein receptors in target cells. The hormonereceptor complexes interact with particular short nucleotide sequences in the chromosomal DNA and modulate transcription of nearby genes. This model, however, cannot account fully for the complex tissue-specific and gene-specific actions of hormones. Transcriptional induction by steroids is influenced by many factors, such as local chromatin structure (2), stages of the cell cycle (3), cellular morphology or differentiation state (4, 5), specific hormone ligand (6), and physiological state (7). Differential hormone responsiveness depends in part on the availability of other transcriptional regulatory proteins including coactivators and corepressors, which do not themselves bind to DNA (8), and accessory factors, which are DNA-binding proteins (9). For glucocorticoid-regulated genes, several accessory factors have been identified (2, 10 -17), but the mechanisms by which these proteins potentiate hormonal activation of transcription are not known.To understand the role of accessory DNA-binding proteins in determining responsiveness to a steroid hormone signal, we are investigating glucocorticoid induction of fibrinogen gene expre...