The rat organic anion transporting polypeptide 2 (oatp2; Slc21a5) is a liver transporter that mediates the uptake of a variety of structurally diverse compounds, and has a high affinity for cardiac glycosides. Treatment of rats with pregnenolone-16alpha-carbonitrile (PCN), a ligand for the rodent pregnane X receptor (PXR), significantly enhances the rat oatp2 gene expression. To understand the molecular mechanism of oatp2 induction by PCN, rat oatp2 gene was cloned. The rat oatp2 gene consists of 16 exons; alternative splicing of the second noncoding exon gives rise to the two published rat oatp2 cDNAs. Approximately 8700 base pairs (bp) of the 5'-flanking region of the rat oatp2 gene were linked to the luciferase reporter gene and used in transient transfection assays in H4IIE cells. Treatment of PCN induced the expression of the reporter gene in a dose-dependent manner. Four potential PXR response elements (PXREs) were identified in the 5'-flanking region of the rat oatp2 gene. One element (DR3-1) is located approximately -5000 bp with three more (DR3-2, DR3-3, and DR3-4) clustered at about -8000 bp. Results from electrophoretic mobility shift assays showed that the PXR-retinoid X receptor alpha heterodimer binds to the DR3-2 with the highest affinity, to the DR3-4 and DR3-1 with a lower affinity, and weakly or not at all to the DR3-3. Furthermore, a series of partial deletions of the 5'-flanking region illustrated that both the proximal and distal clusters of PXREs are required for maximal induction of rat oatp2 by PCN. In conclusion, these data elucidate the molecular mechanism by which PCN treatment induces rat oatp2 gene expression. In addition, this study identifies rat oatp2 as a direct PXR-targeted gene and further supports the hypothesis that activation of PXR affects a network of genes that is involved in either metabolism or transport of drugs, steroids, and bile acids.