ACAT catalyzes the formation of cholesteryl esters from cholesterol and long-chain fatty acids. There are two known genes encoding the two ACAT enzymes, ACAT1 and ACAT2 (also known as Soat1 and Soat2). In adult humans, ACAT1 is present in most tissues, whereas ACAT2 is localized to enterocytes and hepatocytes. In this report, we elucidate the mechanisms that control the liver-specific expression of the human ACAT2 gene. We identified hepatic nuclear factor 1 (HNF1) as an important liver-specific transacting element for the human ACAT2 gene using the human hepatocellular carcinoma cell lines HuH7 and HepG2. Tar ACAT is an integral membrane protein of the rough endoplasmic reticulum that catalyzes the formation of cholesteryl esters from cholesterol and long-chain fatty acids (1). The solubility characteristics of cholesteryl esters make them the major choice for the storage of cholesterol, mostly as cytoplasmic lipid droplets inside the cells. Thus, ACAT is a key enzyme in the control of intracellular cholesterol storage and in determining the level of free cholesterol (2). There are two known genes that encode the two ACAT enzymes, ACAT1 and ACAT2, also known by international convention as steroyl O -acyltransferase (i.e., Soat1 and Soat2, respectively) (3). ACAT1 has been shown to be present in most tissues, whereas the location of ACAT2 has been relatively unclear. According to previous studies (4-6), ACAT2 is found mainly in the apical region of the intestinal villi and in human fetal liver, whereas ACAT1 is the major ACAT isoenzyme in adult human liver. However, we recently showed that ACAT2 is the major ACAT isoenzyme in adult human liver and that it is located in hepatocytes, whereas ACAT1 is located in Kupffer cells (7). This is consistent with similar findings in mice and nonhuman primates (8,9) and is also in agreement with the proposed role for ACAT2 in the assembly and secretion of cholesteryl esters in lipoproteins.Based on this new knowledge, ACAT2 may be a viable target for the treatment and prevention of diseases associated with cholesterol accumulation (e.g., atherosclerosis). Thus, it is of great importance to characterize the mechanisms involved in ACAT2 transcriptional regulation. In the present study, we identify an important liver-specific cis -acting element in the promoter region of ACAT2 that acts as a putative binding site for the hepatic nuclear factor 1 (HNF1). This element serves as a positive regulator of gene expression and is functionally active. Finally, by chromatin immunoprecipitation assay, we show that the transcription factors HNF1 ␣ and HNF1  bind to the identified promoter region of ACAT2 in vivo in human liver.