Glucocorticoids stimulate transcriptional initiation within integrated mammary tumor virus (MTV) DNA sequences in infected cells. We report here that production of herpes simplex virus thymidine kinase (tk) RNA is stimulated as much as 50-fold by the glucocorticoid, dexamethasone, when sequences from a particular region of MTV DNA are fused upstream of the normally constitutive tk promoter region. Three cloned fragments of MTV DNA were tested, each itself lacking the sequences required for transcription initiation. We monitored the effects of dexamethasone on the efficiency with which these recombinants transfect a tk- rat cell line to a tk+ phenotype, and measured tk enzymatic activity, the size and abundance of tk mRNA, and the 5' termini of tk transcripts in the transfectants. We conclude that the MTV promoter region contains a "glucocorticoid response element" that can be separated from a second element essential for MTV transcription initiation. The hormone response element maps within a 340-base pair MTV DNA fragment that contains specific binding sites for purified glucocorticoid receptor protein in vitro, implying that receptor binding at these sites in vivo may mediate hormone responsiveness. Comparison of several different constructions indicates that the location and orientation of the glucocorticoid response element relative to the transcription start site is not rigidly constrained.