The hepatocyte nuclear factor-3 (HNF-3)/fork head homolog (HFH) proteins are an extensive family of transcription factors, which share homology in the winged helix DNA binding domain. Members of the HFH/winged helix family have been implicated in cell fate determination during pattern formation, in organogenesis, and in cell-type-specific gene expression. In this study we isolated a full-length HFH-3 cDNA clone from a human kidney library which encoded a 351-amino acid protein containing a centrally located winged helix DNA binding domain. We demonstrate that HFH-3 is a potent transcriptional activator requiring 138 C-terminal residues for activity. We used in situ hybridization to demonstrate that HFH-3 expression is restricted to the epithelium of the renal distal convoluted tubules. We determined the HFH-3 DNA binding consensus sequence by in vitro DNA binding site selection using recombinant HFH-3 protein and used this consensus sequence to identify putative HFH-3 target genes expressed there. These putative HFH-3 target genes include the Na/KATPase, Na/H and anion exchangers, E-cadherin, and mineralocorticoid receptor genes as well as genes for the transcription factors HNF-1, vHNF-1, and HNF-4.Deciphering the mechanisms that lead to cell-specific gene transcription is critical for understanding cellular differentiation during mammalian embryogenesis. Differential expression of protein encoding genes occurs at the point of transcriptional initiation (1) and involves the assembly of several well characterized basal factors with TATA-binding protein, TATAbinding protein-associated factors, and RNA polymerase II at the initiation site of the promoter region (2). Promoter and enhancer regions are also composed of multiple DNA sites that interact with sequence-specific transcription factors, which are believed to enhance the recruitment of basal factors to the initiation complex. Cell-restricted gene expression thus relies upon the combinatorial recognition of multiple cis-acting DNA sequences bound by families of cell-specific nuclear factors, which potentiate or repress transcriptional initiation (3). Because transcription factors play a central role in regulating cellular differentiation, the analysis of their molecular structure and expression patterns has facilitated elucidation of regulatory pathways involved in establishing tissue-specific gene transcription. In combination with other cell-specific transcription factors, the hepatocyte nuclear factor-3␣ (HNF-3␣) 1 and -3 proteins regulate cell-specific transcription in hepatocytes (4) and in respiratory (5-8) and intestinal epithelium (9). The HNF-3/fork head homolog (HFH) proteins are an extensive family of transcription factors that share homology in the winged helix DNA binding domain (10