Expression of the rat gene designated S14 is rapidly and markedly induced by 3,3',5-triiodo-L-thyronine (T3) in the liver. We have used nuclear run-on assays and transfection studies to explore the basis of this regulation. These studies indicate that T3 induction of hepatic S14 mRNA is due primarily, if not exclusively, to changes in the rate of gene transcription. Both alpha and beta forms of the thyroid hormone receptor (c-erbA) can activate S14 promoter activity in a co-transfection assay. This activation occurs in a dose-dependent manner and requires the expression of the T3 receptor from transfected cDNA in either COS-1 cells or primary rat hepatocytes. Delineation of sequences essential for control of S14 promoter activity indicates that multiple thyroid hormone response elements (TREs) are involved. These TREs have been localized in the far upstream 5'-flanking region of the S14 gene, approximately 2.7 kilobases from the S14 transcriptional initiation site. DNA-binding studies with in vitro translated c-erbA indicate that each of the S14 TREs contains a specific binding site for the receptor. The location of the S14 TREs far upstream from the promoter site may necessitate the presence of multiple TREs for hormonal responsiveness.