Glucocorticoid receptor binding sites (GRE) are often tightly clustered with other transcription factor binding sequences. Examples of this occur upstream of the genes for chicken lysozyme and human metallothionein IIA (ref. 3), in several retroviral LTRs and upstream of the rat tryptophan oxygenase (TO) gene. In the TO gene, sequences immediately upstream of a glucocorticoid receptor binding site are required for steroid induction and contain a CACCC-box identical to that found in the beta globin gene. Here we demonstrate specific binding to this TO-CACCC element and show that it will also act cooperatively with a MMTV glucocorticoid receptor binding site. The response to dexamethasone is independent of the order and relative orientation of these elements but does depend on their precise spacing. Optimal induction occurs at a periodicity of approximately 10 base pairs (bp) indicating a requirement for stereospecific alignment. Binding to the CACCC box, however, is not affected by its distance from the glucocorticoid receptor site. We conclude that the observed cooperativity is mediated by protein:protein interactions and does not depend on cooperative DNA binding.