Expression of the somatostatin gene in endocrine pancreatic cells is controlled by several regulatory cis-elements located in the promoter region. Among these, the adjacent UE-A and TSEI elements, located from -113 to -85 relative to the transcription initiation site, function in combination and act as a pancreas-specific mini-enhancer. The TSEI element is recognized by the pancreatic homeodomain factor PDX1. In the present study, we show that the UE-A element binds a heterodimeric complex composed of a Pbx factor and the Prep1 protein, both belonging to the atypical three-amino acid loop extension homeodomain family. Recombinant Pbx1 and Prep1 proteins bind cooperatively to the UE-A site, whereas neither protein can bind this site alone. Transient transfection experiments reveal that both Pbx1 and Prep1 are required to generate a strong transcriptional activation from the UE-A element when this element is inserted close to the TATA box. In contrast, in the context of the intact somatostatin promoter or mini-enhancer, Pbx1 and Prep1 alone have no effect, but they produce a drastic activation when the pancreatic homeodomain factor PDX1 is also coexpressed. Thus, the activity of the somatostatin mini-enhancer is mediated by a cooperative interaction between the Pbx-Prep1 heterodimeric complex and the pancreatic factor PDX1.