The gene for liver-type arginase, an ornithine cycle enzyme, is induced by glucocorticoids in a delayed secondary manner. An enhancer element located around intron 7 of the rat arginase gene shows delayed glucocorticoid responsiveness, and it harbors two sites binding with members of the CCAAT/enhancer binding protein (C/EBP) family. Here, we investigate the role of these C/EBP binding sites in glucocorticoid response of the arginase gene. When inserted in front of the herpes simplex virus thymidine kinase promoter, these C/EBP sites exhibited glucocorticoid responsiveness in reporter transfection assay using rat hepatoma H4IIE cells. In footprint analysis using nuclear extracts of H4IIE cells, profiles of the protected areas of the two C/EBP sites changed when cells were treated with dexamethasone. In gel shift analysis, the complex formation for the two C/EBP sites was augmented in response to dexamethasone. Antibody supershift/inhibition analysis demonstrated that a major portion of the binding proteins induced by dexamethasone is C/EBP. Induction of arginase mRNA by dexamethasone was preceded by augmentation of the C/EBP site-binding activities, which followed increase in C/EBP mRNA. These results were consistent with the notion that the glucocorticoid response of the arginase gene is mediated by C/EBP.