Background: Identification of cis- and trans-acting factors regulating gene expression remains an important problem in biology. Bioinformatics analyses of regulatory regions are hampered by several difficulties. One is that binding sites for regulatory proteins are often not significantly over-represented in the set of DNA sequences of interest, because of high levels of false positive predictions, and because of positional restrictions on functional binding sites with regard to the transcription start site.Results: We have developed a novel method for the detection of regulatory motifs based on their local over-representation in sets of regulatory regions. The method makes use of a Parzen window-based approach for scoring local enrichment, and during evaluation of significance it takes into account GC content of sequences. We show that the accuracy of our method compares favourably to that of other methods, and that our method is capable of detecting not only generally over-represented regulatory motifs, but also locally over-represented motifs that are often missed by standard motif detection approaches. Using a number of examples we illustrate the validity of our approach and suggest applications, such as the analysis of weaker binding sites.Conclusions: Our approach can be used to suggest testable hypotheses for wet-lab experiments. It has potential for future analyses, such as the prediction of weaker binding sites. An online application of our approach, called LocaMo Finder (Local Motif Finder), is available at http://sysimm.ifrec.osaka-u.ac.jp/tfbs/locamo/.