Background: Current approaches for identifying transcriptional regulatory elements are mainly via the combination of two properties, the evolutionary conservation and the overrepresentation of functional elements in the promoters of co-regulated genes. Despite the development of many motif detection algorithms, the discovery of conserved motifs in a wide range of phylogenetically related promoters is still a challenge, especially for the short motifs embedded in distantly related gene promoters or very closely related promoters, or in the situation that there are not enough orthologous genes available. Results: A mutation degree model is proposed and a new word counting method is developed for the identification of transcriptional regulatory elements from a set of co-expressed genes. The new method comprises two parts: 1) identifying overrepresented oligo-nucleotides in promoters of co-expressed genes, 2) estimating the conservation of the oligo-nucleotides in promoters of phylogeneti...