muNTS1, an element isolated from the nontranscribed spacer of murine rDNA, increases the occurrence of amplification-dependent transformation in mouse cells when integrated into plasmid DNA containing a selectable marker (Wegner, M., Zastrow, G., Klavinius, A., Schwender, S., Müller, F., Luksza, H., Hoppe, J., Wienberg, J., and Grummt, F. (1989) Nucleic Acids Res. 17, 9909-9932). In an initial attempt to dissect muNTS1 into its structural components we localized part of the transformation increasing activity to a long AT-rich stretch from the 5' region which interacts with HMG-I. Here we identify a second element on muNTS1 which also stimulates the rate of amplification-coupled transformation in cis. It is found in the 3' region of muNTS1 and contains the 11-base pair palindrome ATGGCTGCCAT. It is conserved in the otherwise strongly divergent ribosomal NTS regions from mouse, rat, and man and is also found in the origin/enhancer region of human papovavirus JC. The palindromic sequence interacts specifically with proteins from mouse cell extracts. Protein-DNA interaction was dependent on the presence of zinc ions in the extract. Point-specific mutations within the palindrome reduced protein-DNA complex formation substantially and concomitantly abolished the ability to stimulate the frequency of transformation. The binding activity was purified and shown to consist of two polypeptides with molecular masses of 70 and 73 kDa.