The transcription factor CCAAT/enhancer binding protein beta, C/EBP beta, plays a significant role in the regulation of hepatocyte growth and differentiation. A single mRNA coding for C/EBP beta produces several protein isoforms. Two pathways for generation of low molecular weight C/EBP beta isoforms have been described: specific proteolytic cleavage and initiation of translation from different AUG codons of C/EBP beta mRNA, A truncated C/EBP beta isoform, LIP, is induced in rat livers in response to partial hepatectomy (PH) via the alternative translation mechanism. Here we present evidence that CUG repeat binding protein, CUGBP1, interacts with the 5' region of C/EBP beta mRNA and regulates translation of CIEBPP isoforms, Two binding sites for CUGBP1 are located side by side between the first and second AUG codons of C/EBP beta mRNA, One binding site is observed in an out of frame short open reading frame (sORF) that has been previously shown to regulate initiation of translation from different AUG codons of C/EBP beta mRNA, Analysis of cytoplasmic and polysomal proteins from rat liver after PH showed that CUGBP1 is associated with polysomes that translate row molecular weight isoforms of C/EBP beta, The binding activity of CUGBP1 to the 5' region of C/EBP beta mRNA shows increased association with these polysomal fractions after PH. Addition of CUGBP1 into a cell-free translation system leads to increased translation of low molecular weight isoforms of C/EBP beta. Our data demonstrate that CUGBP1 protein is an important component for the regulation of initiation from different AUG codons of C/EBP beta mRNA.