Retinoic acid regulates the expression of genes involved in cell proliferation, differentiation and survival by direct control of gene transcription via activation of nuclear retinoid receptors bound to response elements in the promoters of target genes or by indirect mechanisms. Herein, we investigated the mechanism by which retinoic acid induces the expression of the human tumor suppressor GPRC5A. The proximal 5' upstream region of the GPRC5A gene was found to contain two potential RAR/RXR binding sites (RAREs) and one VDR/RXR binding site with direct repeat 5 (DR5) motifs designated DR5I (-489 to -473), DR5II (-136 to -120) and DR5III (-81 to -65). DR5II and DR5III but not DR5I were conserved among vertebrates. However, only DR5III (5'-TGT CCC TCT GCT CAC CC-3') was found to be the functional RARE for mediating induction of GPRC5A as indicated by electrophoretic mobility shift assay using wild type and mutated synthetic oligonucleotides representing different fragments of the promoter for competition with retinoic acid receptor beta RARE. Chromatin immunoprecipitation assay confirmed the binding of retinoic acid receptors alpha and gamma and retinoid X receptors alpha and beta to DR5III in intact cells. These results demonstrate the importance of functional analysis for validating the activity of predicted response elements.