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Glucocorticoids are known regulators of the cell cycle, normally exerting an anti-proliferative effect. We have previously shown that glucocorticoids stimulate expression of p57(Kip2), a member of the Cip/Kip family of cyclin-dependent kinase inhibitors which, in some cell types, may account for the anti-proliferative responses seen after glucocorticoid treatment. The induction of p57(Kip2) involves primary transcriptional effects where no de novo protein synthesis is necessary, suggesting a direct interaction of the glucocorticoid receptor with the p57(Kip2) gene. In this study we have identified a functional glucocorticoid response element (GRE), located 5 kilo bases (kb) upstream of the transcription start site in the human p57(Kip2) promoter. This GRE was functional also when isolated, suggesting a direct transcriptional effect of the glucocorticoid receptor. Furthermore, mutation of this GRE abolished glucocorticoid induction of the reporter gene, whereas mutation of a nearby Sp1 site did not. Using electrophoretic mobility shift assays, we have shown that the -5 kb p57(Kip2) promoter GRE was able to compete with a well-known GRE for glucocorticoid receptor binding. Sequence comparisons with the mouse genome showed that this GRE is highly conserved, further strengthening the biological importance of this site. All these data emphasize the involvement of this GRE in the glucocorticoid-mediated induction of p57(Kip2) expression.