MK is a gene that is activated by retinoic acid in embryonal carcinoma (EC) cells and is expressed temporarily during the mid-gestation period of mouse embryogenesis. Midkine, the product of the gene is a novel heparin-binding growth/differentiation factor with neurite outgrowth and neurotrophic activities. The regulatory DNA element in the retinoic acid-induced expression of the MK gene has been investigated. The 1.9 kb 5'-flanking region of the MK gene can mediate retinoic acid-responsive gene expression in F9 and HM-1 EC cells. Analysis of this region by deletion mutagenesis in F9 EC cells shows that there is a retinoic acid-responsive enhancer (designated as REM1) around 900 bp upstream from the transcription start site. This enhancer is composed of two sequence elements, which are located between -1006 and -895 and between -901 and -794. The core element of the upstream region (-971 to -955), whose deletion abolished the retinoic acid responsiveness, contained a sequence highly homologous to a binding site for retinoic acid receptors. Binding of a retinoic acid receptor heterodimer to this core element was verified by gel shift assay. Thus, retinoic acid and the receptor complex can directly induce the expression of a growth/differentiation factor gene.