Regulation of gonadotropin gene expression by sex steroids may occur via direct effects on the pituitary and/or by indirect effects of steroid on the hypothalamus. To study direct estrogen regulation of the rat luteinizing hormone beta (LH beta) gene, we performed estrogen receptor-DNA binding studies and transient expression gene transfer experiments. Nitrocellulose filter binding studies were performed with purified estrogen receptor from calf uterus and labeled fragments of the LH beta gene. Dose-dependent specific binding to receptor occurred only with LH beta gene fragments containing a common 284-base region from -1388 to -1105 bases upstream from the transcriptional start site. This DNA region contained a 15-base imperfect palindromic region (GGACACCATCTGTCC) with sequence similarity to other estrogen-responsive elements. Biological function was tested by inserting portions of the 5'-flanking region of the gene next to the herpes simplex virus thymidine kinase promoter fused to the chloramphenicol acetyltransferase gene (LH beta-tkCAT) and performing gene transfer experiments with the pituitary GH3 cell line. Promoter activity in LH beta-tkCAT constructs containing LH beta gene sequences from bases -2013 to -613, or from bases -1388 to -613 in either orientation, exhibited stimulation with 17 beta-estradiol (E2) treatment; in contrast, constructs containing bases -885 to -613 were not regulated by E2. Positive regulation by E2 exhibited dose- and time-dependent stimulation, with a maximum 2- to 6-fold effect achieved after 48 h of treatment with 10(-8) M E2. The estrogen receptor appeared to be required for this biological response. Stimulation of LH beta-tkCAT constructs did not occur in L cells with undetectable levels of E2 receptor, but did occur after cotransfection of an LH beta-tkCAT construct and an expression vector containing the human estrogen receptor cDNA. These studies demonstrate that a 5'-flanking region of the rat LH beta gene can bind to the estrogen receptor and that this region can confer hormonal responsiveness to a heterologous promoter. Thus, positive steroid regulation of luteinizing hormone may occur directly on the pituitary at the level of the LH beta gene.