The mechanisms regulating the expression of the neuropeptide hormone gene oxytocin have not yet been elucidated in detail. The binding of the orphan receptor Ad4BP, the bovine homolog of steroidogenic factor-1 (SF-1), which is correlated with in vivo oxytocin transcription in the luteinizing granulosa cells of the bovine corpus luteum, is not sufficient to explain the transcriptional up-regulation in these cells. Therefore, we started experiments to identify other regions of the oxytocin locus that are involved in gene activation. The study presented here is the very first investigation of DNA methylation and chromatin structure in the distal promoter region of the bovine oxytocin gene. We show that this region is tissue-specifically hypomethylated in bovine granulosa cells. Upon stimulation of the cells with the adenylate cyclase-activator forskolin, a DNase I-hypersensitive site is induced in the distal promoter region. Additionally, we find binding of a monomeric nuclear orphan receptor directly within the region of inducible DNase I sensitivity; this factor is not identical to Ad4BP/SF-1. This study identifies a region in the bovine oxytocin distal promoter where tissue-specific changes in DNA methylation and chromatin structure correlate with high induction of oxytocin gene transcription, and suggests that the binding of transcription factors to this region may be important for the up-regulation of oxytocin gene expression.