To facilitate the understanding of the complex process of target gene expression and its control, we report a modified inducible system for activation or repression of target gene expression in response to an exogenously administered compound. The main component of this inducible system is a chimeric transcriptional activator (GLVP) consisting of an N-terminal VP16 transcriptional activation domain fused to a yeast GAL4 DNA binding domain and a mutated human progesterone receptor (hPR) ligand binding domain (LBD). This chimeric regulator binds to a target gene containing the 17-mer GAL4 upstream activation sequence (UAS) in the presence of anti-progesterone, RU486. We showed that the combination of two different types of domains (VP16 and poly-glutamine stretch) into one chimeric molecule could result in a further increase in transcriptional activation potency. Through mutational analysis, we modified the original GLVP and generated a more potent version of the RU486 inducible regulator GL914 VPc with a 19 amino acid deletion of the hPR-LBD (delta C19) and a C-terminally located VP16 activation domain. More importantly, this new chimeric regulator can effectively activate target gene expression at a much lower concentration of RU486 (0.01 nM). The concept of RU486 regulatable gene expression is not limited to gene activation. By replacing the VP16 activation domain with a KRAB transcriptional repression domain, we are able to achieve inducible repression of target gene expression. We also present evidence that individual functional domains within a chimeric protein could modulate each other's function depending on their relative positions within the molecule. Using this potent regulator, we demonstrate that inducible nerve growth factor (NGF) secretion into conditioned media can elicit neurite outgrowth in co-cultured PC12 cells. This new versatile inducible system can potentially be used to control target gene expression in a mammalian system in vivo.