Multidrug resistance (MDR) is often associated with overexpression of P-glycoprotein, which is encoded by the mdr gene family. Three mdr genes, i.e., mdr1a (mdr3), mdr1b (mdr1), and mdr2 are present in rodents, and the expression of these genes is temporally and tissue specifically regulated. Furthermore, expression of mrd1b is highly elevated during rat hepatocarcinogenesis. To elucidate how mdr1b expression is regulated, we cloned the genomic sequence of the rat mdr1b gene and functionally dissected its 5' promoter region in various cell lines. The transcription start site identified by the primer extension and RNase protection assays is identical to that of the murine mdr1b homologue. Sequence analysis revealed that the proximal region (within -1300 bp) of the rat mdr1b gene also shares striking similarity to that of the mouse mdr1b gene, Transient transfection assays using reporter gene constructs containing various lengths of the 5' mdr1b sequences revealed that the sequence located between -247 to -126 bp was important for the expression of the reporter gene in many different cell lines, Further analyses revealed that at least one regulatory element located at -189 to -167 bp, which contained the palindromic sequence 5'-AGACATGTCT-3' (-189 to -180 bp), is involved in the promoter function, Gel mobility shift assays demonstrated that this palindromic sequence is essential for specific protein binding, UV cross-linking experiments identified that two major proteins with molecular masses of approximately 41 and 49 kDa were associated with this sequence. A Genbank search and gel motility shift assay competition experiment suggested that the specific binding protein(s) appears to be a novel transcription factor involved in the regulation of the rat mdr1b gene expression.