Expression of CYP1A1 gene is regulated in a substrate-inducible manner through at least two kinds of regulatory DNA elements in addition to the TATA sequence, XRE (xenobiotic responsive element), and BTE (basic transcription element), a GC box sequence. The trans-acting factor on the XRE is a heterodimer consisting of arylhydrocarbon receptor (AhR) and AhR nuclear translocator (Arnt), while Sp1 acts as a regulatory factor on the BTE. We have investigated how these factors interact with one another to induce expression of the CYP1A1 gene. Both in vivo transfection assays using Drosophila Schneider line 2 (SL2) cells, which is devoid of endogenous Sp1, AhR, and Arnt, and in vitro transcription assays using baculovirus-expressed AhR, Arnt, and Sp1 proteins revealed that these factors enhanced synergistically expression of the reporter genes driven by a model CYP1A1 promoter, consisting of four repeated XRE sequences and a BTE sequence, in agreement with previous observation (Yanagida, A., Sogawa, K., Yasumoto, K., and Fujii-Kuriyama, Y. (1990) Mol. Cell. Biol. 10, 1470-1475). We have proved by coimmunoprecipitation assays and DNase I footprinting that both AhR and Arnt interact with the zinc finger domain of Sp1 via their basic HLH/PAS domains. When either the AhR.Arnt heterodimer of Sp1 was bound to its cognate DNA element, DNA binding of the second factor was facilitated. Survey of DNA sequences in the promoter region shows that the XRE and GC box elements are commonly found in the genes whose expressions are induced by polycyclic aromatic hydrocarbons, suggesting that the two regulatory DNA elements and their cognate trans-acting factors constitute a common mechanism for induction of a group of drug-metabolizing enzymes.