All-trans-retinoic acid (RA) is known to increase the rate of transcription of the PEPCK gene upon engagement of the RA receptor (RAR). RA also mediates induction of specific gene transcription via several signaling pathways as a nongenomic effect. Here we show that RA upregulation of PEPCK promoter activity requires the cAMP response element (CRE)-1 in addition to the RA-response element and that activating transcription factor-2 (ATF-2) binds the CRE element to mediate this effect. Furthermore, we show that RA treatment potentiates ATF-2-dependent transactivation by inducing specific phosphorylation of ATF-2 by p38beta kinase. ATF-2 activation by RA blocked the inhibitory intramolecular interaction of ATF-2 amino and carboxyl terminal domains in a p38beta kinase-dependent manner. Consistent with these results, RA treatment increased the DNA binding activity of ATF-2 on the PEPCK CRE-1 sequence. Taken together, the data suggest that RA activates the p38beta kinase pathway leading to phosphorylation and activation of ATF-2, thereby enhancing PEPCK gene transcription and glucose production.