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PXR is a xenobiotic receptor that regulates drug metabolism by regulating the expression of drug-metabolizing enzymes including CYP3A4. It can be modulated by chemicals with different structures, functional groups and sizes. X-ray crystal structures of the ligand binding domain of human PXR (hPXR) alone or bound with agonists reveal a highly hydrophobic ligand binding pocket where the aromatic amino acid residue W299 appears to play a critical role in ligand binding. Here, we have investigated the role of W299 on the functional consequence of hPXR ligand binding. We first found that substitution of W299 with a hydrophobic residue retained its response to rifampicin, but substitution with a charged residue altered such agonist response in activating the transcription of CYP3A4. The activity of hPXR mutants on CYP3A4 expression correlates with the ability of hPXR mutants to interact with co-activator SRC-1. We further demonstrated that the effect of replacing W299 by residues with different side chains on hPXR's function varied depending on the specific agonist used. Finally we interpreted the cellular activity of the hPXR mutants by analyzing reported crystallographic data and proposing a model. Our findings reveal the essential role of W299 in the transactivation of hPXR in response to agonist binding, and provide useful information for designing modulators of hPXR.