Previous studies have implied that a transcription factor(s) other than Pit-1 is involved in homeostatic regulation of PRL promoter activity via Pit-1-binding elements. One such element, 1P, was employed to clone from a rat pituitary cDNA expression library a novel 417-amino acid WD protein, designated PREB (PRL regulatory element binding) protein. PREB contains two PQ-rich potential transactivation domains, but no apparent DNA-binding motif, and exhibits sequence-specific binding to site 1P, to a site nonidentical to that for Pit-1. The PREB gene (or a related gene) is conserved, as an apparently single copy, in rat, human, fly, and yeast. A single approximately 1.9-kb PREB transcript accumulates in GH3 rat pituitary cells, to levels similar to Pit-1 mRNA. PREB transcripts were detected in all human tissues examined, but the observation of tissue-specific multiple transcript patterns suggests the possibility of tissue-specific alternative splicing. RT-PCR analysis of human brain tumor RNA samples suggested region-specific expression of PREB transcripts in brain. Western and immunocytochemical analysis implied that PREB accumulates specifically in GH3 cell nuclei. Transient transfection employing PREB-negative C6 rat glial cells showed that PREB is as active as, and additive with, Pit-1 in transactivation of a PRL promoter construct; and that PREB, but not Pit-1, can mediate transcriptional activation by protein kinase A (PKA). Expression in GH3 cells of a GAL4-PREB fusion protein both strongly transactivated a 5XGAL indicator construct and yielded a further stimulation of expression of this construct by coexpressed PKA, implying that PREB can mediate both basal and PKA-stimulated transcriptional responses in pituitary cells. These observations imply that PREB will prove to play a significant transcriptional regulatory role, both in the pituitary and in other organs in which transcripts of its gene are expressed.