The nuclear receptor hepatocyte nuclear factor 4 (HNF-4) is an important regulator of several genes involved in diverse metabolic and developmental pathways. Mutations in the ANF-4A gene are responsible for the maturity-onset diabetes of the young type 1. Recently, we showed that the 24 N-terminal residues of HNF-4 function as an acidic transcriptional activator, termed AF-1 (Hadzopoulou-Cladaras, M., Kistanova, E., Evagelopoulou, C., Zeng, S., Cladaras C., and Ladias, J. A. A. (1997) J. Biol. Chem. 272, 539-550). To identify the critical residues for this activator, we performed an extensive genetic analysis using site-directed mutagenesis. We showed that the aromatic and bulky hydrophobic residues Tyr(6), Tyr(14), Phe(19), Lys(10), and Lys(17) are essential for AF-1 function. To a lesser degree, five acidic residues are also important for optimal activity. Positional changes of Tyr(6) and Tyr(14) reduced AF-1 activity, underscoring the importance of primary structure for this activator. Our analysis also indicated that AF-1 is bipartite, consisting of two modules that synergize to activate transcription. More important, AF-1 shares common structural motifs and molecular targets with the activators of the tumor suppressor protein p53 and NF-kappa B-p65, suggesting similar mechanisms of action. Remarkably, AF-1 interacted specifically with multiple transcriptional targets, including the TATA-binding protein; the TATA-binding protein-associated factors TAF(II)31 and TAF(II)80; transcription factor IIB; transcription factor IIH-p62; and the coactivators cAMP-responsive element-binding protein-binding protein, ADA2, and PC4. The interaction of AF-1 with proteins that regulate distinct steps of transcription may provide a mechanism for synergistic activation of gene expression by AF-1.