The PGC-1s (peroxisome-proliferator-activated receptor gamma co-activators) are a family of transcriptional regulators that induce the expression of various metabolic genes. PGC-1 proteins stimulate genes involved in mitochondrial biogenesis, fatty acid oxidation and hepatic gluconeogenesis. Previous studies have demonstrated that the PGC-1alpha and beta isoforms interact with nuclear receptors through the conserved LXXLL (leucine-X-X-leucine-leucine) motifs. In the present study, we have investigated the mechanisms by which these PGC-1 isoforms stimulate gene expression. We have determined that the N-terminus of PGC-1 is responsible for transcriptional activation. Two conserved peptide motifs were identified in the N-terminus of PGC-1alpha and beta isoforms. These domains were named AD1 and AD2 (activation domain 1 and 2). Deletion of both of these motifs decreased the induction of various PGC-1-regulated genes including the PEPCK (phosphoenolpyruvate carboxykinase) and CPT-I (carnitine palmitoyltransferase-I) genes. It was determined that amino acids containing a negative charge in AD1 and the leucine residues in AD2 were important for the transcriptional induction of the PEPCK and CPT-I genes. Disruption of the AD motifs did not diminish the ability of the PGC-1alpha protein to associate with the PEPCK or CPT-I genes. In addition, deletion of the AD domains did not eliminate the ability of PGC-1alpha to interact with the thyroid hormone receptor. The data indicate that the AD1 and AD2 motifs mediate the induction of many PGC-1- responsive genes, but they do not contribute to the recruitment of PGC-1 to target genes.