The mouse germ cell nuclear factor (GCNF), a member of the nuclear receptor superfamily, is highly expressed during gametogenesis and in the developing nervous system. The in vitro translated protein binds as a homodimer to the direct repeat (DR) of the sequence -AGGTCA- (DR-0). In this report, we characterize a DR-0 binding activity in P19 cell extracts that is induced by retinoids. This induction is concentration dependent and specific for embryonal carcinoma cells. The cellular protein binds with the same specificity as in vitro expressed GCNF, but migrates as a slower complex, indicating interaction with partner proteins. Because antisera directed against GCNF recognize this complex, we propose that GCNF is part of the binding activity. Combining in vitro translated GCNF and extracts of non-expressing cells shows that such interactions can be formed posttranslationally. Northern analysis demonstrates a concentration dependent induction of GCNF mRNA by retinoic acid. A time course shows that the level of GCNF binding is transiently elevated, later downregulated, and not detectable in differentiated cells. We propose that GCNF regulation is an important step during determination of embryonal carcinoma cells.