Anti-inflammatory effects of glucocorticoids (GCs) are partly mediated by up-regulation of DUSP1 (dual specificity phosphatase 1), which dephosphorylates and inactivates mitogen-activated protein kinases. We identified putative GC-responsive regions containing GC receptor (GR) binding site consensus sequences that are well conserved between human and mouse DUSP1 loci in position, orientation, and sequence (at least 11 of 15 positions identical) and lie within regions of extended sequence conservation (minimum 65% identity over at least 100 bp). These were located approximately 29, 28, 24, 4.6, and 1.3 kb upstream of the DUSP1 transcription start site. The homology-based approach successfully identified four cis-acting regions that mediated transcriptional responses to dexamethasone. However, there was surprising interspecies divergence in site usage. This could not be explained by variations of the GR binding sites themselves. Instead, variations in flanking sequences appear to have driven the evolutionary divergence in mechanisms of regulation of mouse and human DUSP1 genes. There was a good correlation between the ability of cis-acting elements to respond to GC in transiently transfected reporter constructs and their ability to recruit GR in the context of intact chromatin. We propose that divergence of gene regulation has involved the loss or gain of binding sites for accessory transcription factors that assist in GR recruitment. Finally, a novel GC-responsive region of the human DUSP1 gene contains a highly unusual element, in which three closely spaced GR half-sites are required for potent transcriptional activation by GC.