In mammals, the transmembrane protein kinase/endoribonuclease IRE1 is activated by endoplasmic reticulum stress and subsequently processes XBP1 mRNA to generate an active form of XBP1 protein. The spliced form of XBP1 protein acts as a transcription factor and induces the expression of ER-resident molecular chaperones. However, the mechanism for how XBP1 promotes the transcription of its target genes as well as the cis-acting elements for XBP1 during ER stress has been unclear. Recently, it was demonstrated that the expression of MDG1/ERdj4, a member of the DnaJ family, is regulated by the IRE1-XBP1 pathway. In the present report, we investigated the regulatory mechanisms of MDG1/ERdj4 gene expression by XBP1. We identified a cis-acting element in the MDG1/ERdj4 promoter region, to which XBP1 specifically binds in response to ER stress. Our results reveal a target sequence for the IRE1-XBP1 pathway under ER stress conditions. (c) 2005 Elsevier Inc. All rights reserved.