Hepatocyte nuclear factor-4alpha (HNF-4alpha), the gene for the maturity-onset diabetes of the young type 1 (MODY1) form of type 2 diabetes mellitus (T2DM), is within the T2DM-linked region on chromosome 20q12-q13.1 and consequently, is a positional candidate gene for T2DM. Mutations in the coding region of HNF-4alpha are rare in diabetes affected subjects. Altered regulation of HNF-4alpha gene expression, controlled by distant enhancer sequences, may contribute to the development of type 2 diabetes. Comparative sequence analysis was performed between 13 kb of genomic DNA 5' to the P1 promoter sequences of the human, mouse, and rat HNF-4alpha coding sequences. Three regions, located at -10.5 kb (295 bp in length), -6.25 kb (421 bp in length), and -5.36 kb (263 bp in length), have significant sequence identity between the species. These three regions were functionally characterized using the chloramphenicol acetyltransferase (CAT) reporter assay, in which the conserved 5' regions of mouse HNF-4alpha were cloned in front of the herpes simplex virus thymidine kinase promoter driving transcription of the CAT gene. A fragment containing the 421 bp conserved region significantly increased CAT activity in differentiated rat hepatoma cells (13.7-+/-1.9-fold control), while only a modest increase in CAT activity was observed in pancreatic cells (2.5-+/-0.9-fold control; 1.6-+/-0.1-fold control) and dedifferentiated hepatoma cells (1.7-+/-0.4-fold control). The remaining two conserved regions increased CAT activity minimally in pancreatic (1.1-+/-0.1-fold control to 1.9-+/-0.1-fold control) and hepatic (1.6-+/-0.5-fold control to 2.3-+/-0.4-fold control) cell lines. Denaturing high-performance liquid chromatography (DHPLC) was used to search for sequence variants in DNA from 259 T2DM individuals. Two single nucleotide polymorphisms (SNPs) were identified, both of which increased CAT activity in the insulinoma cell lines in the CAT reporter assay (1.4-fold increase over wild-type; 1.7-fold increase over wild-type). These results suggest that comparative sequence analysis can efficiently identify regulatory elements and that sequence variants in regulatory elements of HNF-4alpha can contribute to altered HNF-4alpha gene expression.