Insulin gene expression is regulated by pancreatic beta cell-specific factors, PDX-1 and BETA2/E47. Here we have demonstrated that the insulin promoter is a novel target for SREBPs established as lipid-synthetic transcription factors. Promoter analyses of rat insulin I gene in non-beta cells revealed that nuclear SREBP-1c activates the insulin promoter through three novel SREBP-binding sites (SREs), two of which overlap with E-boxes, binding sites for BETA2/E47. SREBP-1c activation of the insulin promoter was markedly enhanced by co-expression of BETA2/E47. This synergistic activation by SREBP-1c/BETA2/E47 was not mediated through SREs but through the E-boxes on which BETA2/E47 physically interacts with SREBP-1c, suggesting a novel function of SREBP as a co-activator. These two cis-DNA regions, E1 and E2, with an appropriate distance separating them, were mandatory for the synergism, which implicates formation of SREBP-1c.BETA2.E47 complex in a DNA looping structure for efficient recruitment of CREB-binding protein/p300. However, in the presence of PDX1, the synergistic action of SREBP-1c with BETA2/E47 was canceled. SREBP-1c-mediated activation of the insulin promoter and expression became overt in beta cell lines and isolated islets when endogenous PDX-1 expression was low. This cryptic SREBP-1c action might play a compensatory role in insulin expression in diabetes with beta cell lipotoxicity.