The mechanism by which specific hormonal regulation of gene expression is attained in vivo is a paradox in that several of the steroid receptors recognize the same DNA element in vitro. We have characterized a complex enhancer of the mouse sex-limited protein (Slp) gene that is activated exclusively by androgens but not by glucocorticoids in transfection. Potent androgen induction requires both the consensus hormone response element (HRE) and auxiliary elements residing within the 120-bp DNA fragment C' delta 9. Multiple nonreceptor factors are involved in androgen specificity, with respect to both the elevation of androgen receptor activity and the inactivity of glucocorticoid receptor (GR), since clustered base changes at any of several sites reduce or abolish androgen induction and do not increase glucocorticoid response. However, moving the HRE as little as 10 bases away from the rest of the enhancer allows GR to function, suggesting that GR is repressed by juxtaposition to particular factors within the androgen-specific complex. Surprisingly, some sequence variations of the HRE itself, within the context of C' delta 9, alter the stringency of specificity, as well as the magnitude, of hormonal response. These HRE sequence effects on expression correspond in a qualitative manner with receptor binding, i.e., GR shows a threefold difference in affinities for HREs amongst which androgen receptor does not discriminate. Altering the HRE orientation within the enhancer also affects hormonal stringency, increasing glucocorticoid but not androgen response. The effect of these subtle variations suggests that they alter receptor position with respect to other factors. Thus, protein-protein interactions that elicit specific gene regulation are established by the array of DNA elements in a complex enhancer and can be modulated by sequence variations within these elements that may influence selection of precise protein contacts.