Cyclic AMP-regulated gene expression is mediated by specific phosphoproteins (CREBs) which bind to cAMP-responsive elements of gene promoters. By analyzing the transactivation activities and phosphorylations in vivo of deletion and point mutated chimeric fusion proteins of the placental CREB-327, in which the DNA-binding domain is replaced by the heterologous binding-domain of the yeast transcription factor GAL4, we localized the cAMP-responsive and phosphorylated domain to a minimal-essential sequence module of 46 amino acids (residues 92-137). This serine-rich, multiply-phosphorylated sequence consists of at least three interdependent subdomains required for transcriptional activation. Although phosphorylation of serine-119 by cyclic AMP-dependent protein kinase A is necessary for transcriptional activation, such activation requires both a phosphorylated heptadecapeptide domain located ten residues amino terminal to the serine-119 and an eleven-residue domain carboxyl terminal to the serine-119. Deletion of these two domains does not impair phosphorylation of serine-119. Further, deletion of the carboxyl-terminal domain does not alter phosphorylation of the heptadecapeptide domain. We propose that akin to the phosphorylation-dependent activation of enzymes, the transcriptional transactivation functions of CREB-327 involve a phosphorylation-dependent allosteric conformational mechanism.