Cytochrome P450 (CYP) 3A23 is transcriptionally regulated in rat liver by such glucocorticoids as dexamethasone (DEX) and by such antiglucocorticoids as pregnenolone 16 alpha-carbonitrile (PCN). Based on studies of CYP3A23 gene fragments expressed in primary cultures of adult rat hepatocytes and tested for DNA-protein interactions, we have proposed that the mechanism of CYP3A23 induction by these steroid hormones involves the glucocorticoid receptor or a protein induced by glucocorticoids indirectly interacting with proteins constitutively bound to an enhancer element consisting of a direct repeat of 7-bp separated by two nucleotides in the 5'-flanking region of the CYP3A23 gene (L. Quattrochi et al., J. Biol. Chem. 270, 28,917, 1995). In the present study, we prepared and transiently expressed in cultured rat hepatocytes 20-bp double-stranded (ds)-oligonucleotides containing this direct repeat or various mutations of this direct repeat inserted into a chloramphenicol acetyltransferase (CAT) reporter plasmid. We found that both repeats were necessary for induction of CAT by either DEX or PCN. Analysis of proteins bound to CYP3A23 enhancer through the use of uv cross-linking revealed two rat liver nuclear proteins with molecular masses of approximately 130 and 100 kDa, as well as several proteins of molecular masses between 45 and 60 kDa, that specifically bind to the 20-bp ds-oligonucleotide CYP3A23 enhancer. Methylation interference assays determined that all guanine residues within the direct repeats of this oligonucleotide are important for protein binding. Mutations of these guanine residues abolished binding of nuclear proteins and eliminated DEX or PCN inducibility of CAT. These data suggest that constitutively bound proteins, interacting with the CYP3A23 enhancer possibly as a heterodimeric complex, play a role in the glucocorticoid inducibility of CYP3A23.