Hepatocyte nuclear factor-1alpha (HNF-1alpha) is a homeodomain-containing transcription factor regulating the expression of liver and pancreas-specific genes. Mutations in the HNF-1alpha-encoding gene TCF1 cause maturity-onset diabetes of the young, type 3 (MODY3). These mutations may affect nuclear import or reduce the ability of HNF-1alpha to stimulate transcription. We performed a functional dissection of HNF-1alpha, attempting both to define its nuclear localization signals (NLSs) and to identify important elements of the C-terminal transactivation domain. Three HNF-1alpha regions, A ( amino acids 158 - 171), B ( 197 - 205), and C ( 271 - 282), highly similar to consensus NLSs, were studied by immunolocalization in HeLa cells. Region B could be identified as the most critical for correct nuclear localization. Deletion of two subregions ( amino acids 398 - 470 and 544 - 631, respectively) in the HNF-1alpha C-terminal transactivation domain, resulted in the greatest reduction in stimulation of transcription compared to wild-type protein. However, this domain probably consists of many elements that work in concert to give the full transactivation potential of the protein.