Cytochrome P4501B1 (Cyp1b1) is expressed specifically in certain neural crest (NC) cells during embryogenesis. Mesenchymal progenitor cells that develop from NC cells are modeled here by mouse C3H10T1/2 and 3T3-L1 cells. Dexamethasone in combination with methylisobutylxanthine (DM) induces Cyp1b1 and a 6.7 kb mouse Cyp1b1 promoter-luciferase reporter in each cell type prior to adipogenesis. An 18 base sequence (at -6.11 kb) (PaxE) which was essential for this reporter stimulation in 3T3-L1 cells bound the transcription factor Pax6. This is shown by gel mobility shifts and sequence mutations. Heterologous vector expression of Pax6 in 3T3-L1 cells enhanced DM stimulated Cyp1b1 promoter activity through cooperation with two Sp1 sites in the proximal promoter region. Chromatin immunoprecipitation showed that DM stimulated binding of Pax6 adjacent to Sp1 in the proximal promoter more than in the PaxE region. The Cyp1b1 induction by DM in C3H10T1/2 cells was more rapid but independent of Pax6. The far upstream enhancer region (FUER) found in rat Cyp1b1 responded to DM but was inactive in the mouse promoter due to key sequence changes. The expression patterns of Pax6 and Cyp1b1 frequently overlap during mouse embryogenesis. The relationship between Pax6 and Cyp1b1 expression warrants further investigation, particularly in the NC.