Hepatocyte nuclear factor 1 alpha (HNF1 alpha) and HNF4 alpha are liver-selective transcription factors and are essential for hepatocyte differentiation. This study demonstrates that HNF1 alpha as well as HNF4 alpha genes contain a direct repeat with a space of one nucleotide (DR1)-retinoic acid (RA) response element that can be bound and regulated by RA and retinoid x receptor alpha (RXR alpha) complex. Transient transfection experiments showed that RA increased the promoter activity of the HNF1 alpha and HNF4 alpha genes in Hep3B cells. Overexpression of RXR alpha further enhanced the activities of both genes. Two putative RXR alpha binding sites on the HNF1 alpha (-295 to -276) and HNF4 alpha (-418 to -399) genes have been characterized. By transient transfection, both sites positively responded to RA, and overexpression of RXR alpha in Hep3B cells increased the regulatory effect. Gel mobility shift assay demonstrated that these two DR-I sites could be bound by RXR alpha specifically. These data suggest that the differentiation effect of RA on hepatocyte may be due to direct interaction of RXR alpha with the RA-responsive elements on the HNF1 alpha and HNF4 alpha genes.