We have previously identified a 57-bp DNA fragment encompassing exon 1 of the beta-subunit gene of rat thyrotropin (rTSH beta) that mediates the negative response to L-triiodothyronine (T3). To determine the specific motif that confers this negative regulation, we tested the T3 sensitivity of various segments of this 57-bp gene fragment in transiently transfected pituitary tumor cells, GH3. The suppressive effects were mediated by a 17-bp motif (+11/+27, CGCCAGTGCAAAGTAAG) located at the 3' end of exon 1. The inhibitory effects mediated by the sequence were evident when a single copy of the motif was inserted 125 bp upstream or 11 bp downstream of the transcriptional start site. These findings indicate that the suppressive effect of T3 is an intrinsic property of the T3-responsive element and not dependent on position relative to the promoter. The T3 receptor (T3R) extracted from GH3 cells or expressed in vitro bound specifically to this sequence. Specific mutations introduced into this region result in a selective loss of nuclear protein binding and a corresponding loss of T3 sensitivity. Additional studies showed that the 17-bp sequence was not responsive to T3 in COS cells which lack endogenous T3R. Cotransfection of a T3R restored the T3 responsiveness of the TSH beta motif. In summary, we have identified an element in the rTSH beta gene that mediates negative regulation by T3 and binds to the T3R.