CYP26A1 expression is very highly induced by retinoic acid (RA) in the liver, compared to most other tissues, suggesting that a liver‐enriched factor may be required for its physiological transcriptional response. HNF4α is a highly conserved liver‐specific/enriched member of nuclear receptor superfamily. In this study, we hypothesized that HNF4α and RARs may cooperate in an RA‐dependent manner to induce a high level of CYP26A1 expression in liver cells. Partial inhibition of endogenous HNF4α by siRNA reduced the level of RA‐induced CYP26A1 mRNA in HepG2 cells. Cotransfection of HNF4α, with or without RARs, demonstrated RA‐dependent activation of a human CYP26A1 promoter‐luciferase construct. Analysis of a 2.5‐kbp putative CYP26A1 promoter sequence identified five potential HNF4α DNA response elements: H1 located in a proximal region overlapping with an RAR element‐1 (RARE1 or R1); H2 and H3 in the distal region, close to RARE2 (R2) and RARE3 (R3); and H4 and H5 in intermediary regions. In EMSA and ChIP analyses HNF4α and RARs binding in the proximal and distal CYP26A1 promoter regions was significantly higher in RA‐treated cells. Mutational analysis of the individual HNF4α DNA‐response elements identified H1 as the major site for HNF4α binding because mutation of H1 inhibited the promoter activity by ~90%, followed by H2 mutation with less than 40% inhibition. Our results indicate that HNF4α coordinates with RARs in an RA‐dependent manner to strongly induce CYP26A1 gene expression in the liver, which may explain the high level of response to RA observed in vivo. J. Cell. Biochem. 115: 1740–1751, 2014. © 2014 Wiley Periodicals, Inc.