The Drosophila ras2 promoter region exhibits bidirectional activity, as has been demonstrated for the human c-Ha-ras1 and the mouse c-Ki-ras. Here we address a unique case of ras regulation, as Drosophila ras2 provides the only example to date in which the flanking gene (rop) and its product have been isolated. A linking mechanism of control suggests a mutual interaction between the two gene products. Our studies indicate that the Drosophila ras2 promoter region shares with the human c-Ha-ras1 promoter a CACCC box and an AP-1-like sequence. A 14 bp promoter fragment which holds a CACCC element is demonstrated to interact with a specific transcription factor (factor B). This CACCC promoter element represents a stretch of imperfect palindrome. We present evidence that this factor can form a complex with another specific DNA-binding protein (factor A). The binding sites (A + B) for these protein factors are essential for 95% expression of both genes flanking the promoter (ras2 and rop). Region A consists of four overlapping consensus sequences: a TATA-like element, a DSE-like motif (the core sequence of the serum response element), a DRE octamer, which has been shown to play a role in cell proliferation, and a 5 bp direct repeat representing the GATA consensus sequence. Factor A has a very weak affinity to the full promoter region, but when complexed with factor B binding efficiency is enhanced. We also show that alterations of DNA-protein binding specificities can be achieved by supplementing the growth media with different sera.