We have used exonuclease protection in vivo as an assay to detect interaction of nuclear factors with the steroid-inducible promoter of mouse mammary tumor virus. Binding of two factors is detected uniquely at the steroid-activated promoter, and results in protection of sequences between -82 and approximately +12 One factor is identified as the murine homolog of nuclear factor 1. The second (designated factor i) binds downstream of nuclear factor 1 and protects sequences extending over the cap site. Binding activities associated with both factors can be detected in crude nuclear extracts; their apparent concentrations are unaffected by hormone treatment of the cells. These results demonstrate that glucocorticoid induction of transcription results from receptor-mediated establishment of a transcription factor complex at the promoter rather than activation of a preexisting complex.