The regulation of insulin gene expression in pancreatic -cells is the result of the coordinate activity of specific combinations of transcription factors assembled on different promoter elements. We investigated the involvement of the aristaless-related homeoprotein Alx3 in this process. We found that Alx3 is coexpressed with insulin in pancreatic islets, as well as in the -cell line MIN6, and it is also present in glucagon- and somatostatin-expressing cells. Chromatin immunoprecipitation assays indicated that Alx3 present in MIN6 cells and in mouse pancreatic islets occupies the promoter of the mouse insulin genes. Electrophoretic mobility shift assays indicated that Alx3 present in MIN6 cells binds to the A3/4 regulatory element of the insulin I promoter. We found that Alx3 transactivates the insulin promoter by acting on the E2A3/4 enhancer in conjunction with the basic-helix-loop-helix transcription factors E47/Pan1 and Beta2/NeuroD, and that Alx3 physically interacts via the homeodomain with E47/Pan1 but not with Beta2/NeuroD. Alx3 binds to the A3/4 element as a dimer, and the homeodomain is sufficient to recruit E47/Pan1 to the insulin promoter. Deletion-studies in transfected Hela cells indicated that proline-rich regions located at either side of the Alx3 homeodomain work together with E47/Pan1, and that this requires the integrity of the amino terminal activation domain to transactivate. Thus, these studies support the notion that Alx3 participates in the regulation of insulin gene expression in pancreatic -cells.