It has been suggested that cellular retinoic acid-binding protein (II) (CRABP(II)) may have a role in the movement of retinoic acid (RA) to its nuclear receptors, thereby enhancing the action of RA in the cells in which it is expressed. RA has also been shown to increase expression of CRABP(II). Previous work from our laboratory has shown that 17 beta-estradiol (E2) administration to prepubertal female rats leads to acquisition of the ability of the lining epithelium to synthesize RA as well as to express CRABP(II). To determine whether this appearance of CRABP(II) was dependent on the production of RA, both E2 and RA were administered to ovariectomized rats. E2 administration induced expression of the CRABP(II) gene in the uterus within 4 h, and this induction was not inhibited by prior administration of puromycin, indicating that the induction was direct. In contrast, RA caused no change in CRABP(II) message level, even at times as late as 48 h after administration. Isolation and analysis of 4.5 kb of the 5'-flanking region of the gene revealed no apparent E2-response element. Using this portion of the gene to drive expression of the luciferase gene in transfected cells allowed identification of a region containing an imperfect estrogen-response element and estrogen-response element half-site, necessary for E2-driven induction. A possible Sp1 binding site in the 5'-flanking region of the CRABP(II) gene was also required for this induction. The ability of E2 to induce expression of CRABP(II) suggests that it can enhance the activity of RA, directly affecting expression of retinoid-responsive genes.