Retinoic acid (RA) is known to influence the proliferation and differentiation of a wide variety of transformed and developing cells. We found that RA and the specific RA receptor (RAR) ligand Ch55 inhibited the phorbol ester and calcium ionophore-induced expression of the T-cell growth factor interleukin-2 (IL-2) gene. Expression of transiently transfected chloramphenicol acetyltransferase vectors containing the 5'-flanking region of the IL-2 gene was also inhibited by RA. RA-induced down-regulation of the IL-2 enhancer is mediated by RAR, since overexpression of transfected RARs increased RA sensitivity of the IL-2 promoter. Functional analysis of chloramphenicol acetyltransferase vectors containing either internal deletion mutants of the region from -317 to +47 bp of the IL-2 enhancer or multimerized cis-regulatory elements showed that the RA-responsive element in the IL-2 promoter mapped to sequences containing an octamer motif. RAR also inhibited the transcriptional activity of the octamer motif of the immunoglobulin heavy chain enhancer. In spite of the transcriptional inhibition of the IL-2 octamer motif, RA did not decrease the in vitro DNA-binding capability of octamer-1 protein. These results identify a regulatory pathway within the IL-2 promoter which involves the octamer motif and RAR.