Upstream sequences of the H4 histone gene FO108 located between nt -418 to -213 are stimulatory for in vivo transcription. This domain contains one protein/DNA interaction site (H4-Site III) that binds factor H4UA-1. Based on methylation interference, copper-phenanthroline protection, and competition assays, we show that H4UA-1 interacts with sequences between nt -345 to -332 containing an element displaying sequence-similarity with the thyroid hormone response element (TRE). Using gel retardation assays, we also demonstrate that H4UA-1 binding activity is abolished at low concentrations of Zn2+ (0.75 mM), a characteristic shared with the thyroid hormone (TH) receptor DNA binding protein. Interestingly, phosphatase-treatment of nuclear proteins inhibits formation of the H4UA-1 protein/DNA complex, although a complex with higher mobility (H4UA-1b) can be detected; both complexes share identical protein-DNA contacts and competition behaviors. These findings suggest that phosphorylation may be involved in the regulation of H4-Site III protein/DNA interactions by directly altering protein/protein associations. H4-Site III interactions were examined in several cell culture systems during cell growth and differentiation. We find that H4UA-1 binding activity is present during the cell cycle of both normal diploid and transformed cells. However, during differentiation of normal diploid rat calvarial osteoblasts, we observe a selective loss of the H4UA-1/H4-Site III interaction, concomitant with an increase of the H4UA-1b/H4-Site III complex, indicating modifications in the heteromeric nature of protein/DNA interactions during downregulation of transcription at the cessation of proliferation. Transformed cells have elevated levels of H4UA-1, whereas H4UA-1b is predominantly present in normal diploid cells; this alteration in the ratio of H4UA-1 and H4UA-1b binding activities may reflect deregulation of H4-Site III interactions in transformed cells. We propose that H4-Site III interactions may contribute, together with protein/DNA interactions at proximal regulatory sequences, in determining the level of H4-FO108 histone gene transcription.