The peroxisome proliferator-activated receptor (PPAR) is a member of the steroid hormone receptor superfamily and is activated by a variety of fibrate hypolipidaemic drugs and non-genotoxic rodent hepatocarcinogens that are collectively termed peroxisome proliferators. A key marker of peroxisome proliferator action is the peroxisomal enzyme acyl CoA oxidase, which is elevated about tenfold in the livers of treated rodents. We have previously shown that a peroxisome proliferator response element (PPRE) is located 570 bp upstream of the rat peroxisomal acyl CoA oxidase gene and that PPAR binds to it. We show here that the retinoid X receptor (RXR) is required for PPAR to bind to the PPRE, and that the RXR ligand, 9-cis retinoic acid, enhances PPAR action. Retinoids may therefore modulate the action of peroxisome proliferators and PPAR may interfere with retinoid action, perhaps providing one mechanism to explain the toxicity of peroxisome proliferators. We have also shown that a variety of hypolipidaemic drugs and fatty acids can activate PPAR. This supports the suggestion that the physiological role of PPAR is to regulate fatty acid homeostasis, and provides further evidence that PPAR is the target of the fibrate class of hypolipidaemic drugs. Finally, we have demonstrated that a metabolically stabilized fatty acid is a potent PPAR activator, suggesting that fatty acids, or their acyl CoA derivatives, may be the natural ligands of PPAR.