The dichotomy between cellular differentiation and proliferation is a fundamental aspect of both normal development and tumor progression; however, the molecular basis of this opposition is not well understood. To address this issue, we investigated the mechanism by which the nuclear receptor hepatocyte nuclear factor 4 alpha 1 (HNF4 alpha 1) regulates the expression of the human cyclin-dependent kinase inhibitor gene p21/WAF1 (CDKN1A). We found that HNF4 alpha 1, a transcription factor that plays a central role in differentiation in the liver, pancreas, and intestine, activates the expression of p21 primarily by interacting with promoter-bound Sp1 at both the proximal promoter region and at newly identified sites in a distal region (-2.4 kb). Although HNF4 alpha 1 also binds two additional regions containing deficient in DNA binding activate the p21 promoter to the same extent as wild-type HNF4 alpha 1, indicating that direct DNA binding by HNF4 alpha 1 is not necessary for p21 activation. We also observed an in vitro and in vivo interaction between HNF4 alpha 1 and c-Myc as well as a competition between these two transcription factors for interaction with promoter-bound Sp1 and regulation of p21. Finally, we show that c-Myc competes with HNF4 alpha 1 for control of apolipoprotein C3 (APOC3), a gene associated with the differentiated hepatic phenotype. These results suggest a general model by which a differentiation factor (HNF4 alpha 1) and a proliferation factor (c-Myc) may compete for control of genes involved in cell proliferation and differentiation.