A 469 bp upstream regulatory fragment (URF) and the proximal promoter of the carbamoylphosphate synthetase I (CPS) gene were analyzed for their role in the regulation of spatial, developmental and hormone-induced expression in vivo. The URF is essential and sufficient for hepatocyte-specific expression, periportal localization, perinatal activation and induction by glucocorticoids and cAMP in transgenic mice. Before birth, the transgene is silent, but can be induced by cAMP and glucocorticoids, indicating that these compounds are responsible for the activation of expression at birth. A 102 bp glucocorticoid-response unit (GRU) within the URF, containing binding sites for HNF3, C/EBP and the glucocorticoid receptor, is the main determinant of the hepatocyte-specific and hormone-controlled activity. Additional sequences are required for a productive interaction between this minimal response unit and the core CPS promoter. These results show that the 469 bp URF, and probably only the 102 bp GRU, functions as a regulatory module, in that it autonomously executes a correct spatial, developmental and hormonal program of CPS expression in the liver.