The transcription and transformation activity of cJun is governed by a 27-amino acid regulatory motif, labeled the ␦-domain, which is deleted in v-Jun. We have previously shown that c-Jun is a potent inhibitor of the rat prolactin (rPRL) promoter activity induced by either oncogenic Ras or phorbol esters. Here, we have characterized the structural and cell-specific requirements for this c-Jun inhibitory response, and we show that this c-Jun inhibitory response mapped to the rPRL footprint II repressor site, was pituitary-specific and required the c-Jun ␦-domain. Moreover, alteration of any one of these features (e.g., cis-element, trans-factor, or cell-specific background) switched c-Jun to a transcriptional activator of the rPRL promoter. In HeLa nonpituitary cells, c-Jun alone activated the rPRL promoter via the most proximal GHF-1/Pit-1 binding site, footprint I, and synergized with GHF-1. Finally, recombinant GHF-1 interacted directly with c-Jun but not c-Fos proteins. These data provide important fundamental insights into the molecular mechanisms by which the c-Jun ␦-domain functions as a modulatory switch and further imply that the functional role of c-Jun is dictated by cell-specific influences and the ␦-domain motif.