The first exon of the human thyrotropin-beta (hTSH beta) gene has been demonstrated in our laboratory to contain a major thyroid hormone inhibitory element. In order to characterize fully this element, we have performed a detailed functional and structural scanning mutational analysis of this element. Various -1192 to +37 (base pairs) bp fragments of the hTSH beta gene containing consecutive five deoxythymidine substitution mutations of the first exon were inserted into a luciferase reporter plasmid and transiently transfected into human embryonal cells (293) and stably transfected into rat pituitary cells (GH3). Two domains (domain 1 and 2) were identified by scanning mutations that were essential for function of the thyroid hormone inhibitory element: +3 to +13 bp and +28 to +37 bp. Biotinylated DNA fragments containing -12 to +43 bp of the hTSH beta gene and the identical scanning mutations demonstrate that in vitro synthesized c-erbA-beta binding is disrupted as much as 95% by mutations from -3 to +17 bp and to a lesser extent (20-30%) by mutations from +23 to +27 bp and from +33 to +43 bp. Domain 1 displayed a higher affinity for c-erbA-beta than domain 2 in avidin-biotin complex DNA-binding and gel-mobility assays. Using increasing amounts of in vitro synthesized c-erbA-beta, we were unable to demonstrate more than one protein-DNA complex in gel-mobility assays. However, using the avidin-biotin complex DNA-binding assay and the cross-linking reagent, 1,6-bismaleimidohexane, we were able to demonstrate thyroid hormone receptor dimer formation on domain 1 but not to any significant extent on domain 2. In conclusion, functional and DNA-binding studies suggest that the thyroid hormone receptor binds to two distinct regions in the first exon of the hTSH beta gene. The upstream site (domain 1) binds c-erbA-beta with higher affinity and is capable of binding c-erbA-beta as a dimer under some conditions, while the downstream site (domain 2) appears to bind a single molecule of c-erbA-beta with lower affinity. These results suggest that thyroid hormone receptor, binding to at least two sites in the first exon, act in conjunction to mediate T3 inhibition of hTSH beta expression.