The phenobarbitone-responsive minimal promoter has been shown to lie between nt -179 and nt + 1 in the 5' (upstream) region of the CYP2B1/B2 gene in rat liver, on the basis of the drug responsiveness of the sequence linked to human growth hormone gene as reporter and targeted to liver as an asialoglycoprotein-DNA complex in vivo. Competition analyses of the nuclear protein-DNA complexes formed in gel shift assays with the positive (nt -69 to -98) and negative (nt -126 to -160) cis elements (PE and NE, respectively) identified within this region earlier indicate that the same protein may be binding to both the elements. The protein species purified on PE and NE affinity columns appear to be identical based on SDS/PAGE analysis, where it migrates as a protein of 26-28 kDa. Traces of a high molecular weight protein (94-100 kDa) are also seen in the preparation obtained after one round of affinity chromatography. The purified protein stimulates transcription of a minigene construct containing the 179 nt on the 5' side of the CYP2B1/B2 gene linked to the I exon in a cell-free system from liver nuclei. The purified protein can give rise to all the three complexes (I, II, and III) with the PE, just as the crude nuclear extract, under appropriate conditions. Manipulations in vitro indicate that the NE has a significantly higher affinity for the dephosphorylated form than for the phosphorylated form of the protein. The PE binds both forms. Phenobarbitone treatment of the animal leads to a significant increase in the phosphorylation of the 26- to 28-kDa and 94-kDa proteins in nuclear labeling experiments followed by isolation on a PE affinity column. We propose that the protein binding predominantly to the NE in the dephosphorylated state characterizes the basal level of transcription of the CYP2B1/B2 gene. Phenobarbitone treatment leads to phosphorylation of the protein, shifting the equilibrium toward binding to the PE. This can promote interaction with an upstream enhancer through other proteins such as the 94-kDa protein and leads to a significant activation of transcription.