We previously showed that the 5'-flanking region of the malic enzyme (ME) gene contains a cis-regulatory element (-281 to -261) that binds thyroid hormone receptors and confers triiodothyronine (T3) inducibility of transcription to the ME promoter (Petty, K.J., Desvergne, B., Mitsuhashi, T., and Nikodem, V. M. (1990) J. Biol. Chem. 265, 7395-7400). In this report, we have used deletion and mutation analyses of the ME thyroid hormone response element (TRE) to evaluate the roles of several subregions of TRE in T3 binding and transactivation. ME TRE was shown to act as an enhancer conferring T3 responsiveness to a heterologous promoter thymidine kinase. Although T3 treatment induced the promoter activity, the absence of hormone resulted in repression as measured by the level of chloramphenicol acetyltransferase expression in the NIH 3T3 transient expression system in the presence of overexpressed receptor. The degree of repression was similar to the degree of T3 induction observed for the same TRE mutants. Mutation and deletion analyses indicated that the functional TRE is comprised of discrete regions that are not contiguous, with a dominant role of a cluster of G residues and an AGGACA sequence. Both functions, induction and repression of transcription, correlated with receptor binding to the ME TRE as determined by competition binding assays using wild type and mutated TRE as competitors.