Little is known about how differentiating cells reorganize their cellular structure to perform specialized physiological functions. MIST1, an evolutionarily conserved transcription factor, is required for the formation of large, specialized secretory vesicles in gastric zymogenic (chief) cells (ZCs) as they differentiate from their mucous neck cell progenitors. Here, we show that MIST1 binds to highly conserved CATATG E-boxes to directly activate transcription of 6 genes, including those encoding the small GTPases RAB26 and RAB3D. We next show that RAB26 and RAB3D expression is significantly downregulated in Mist1^−/− ZCs, suggesting that MIST1 establishes large secretory granules by inducing RAB transcription. To test this hypothesis, we transfected human gastric cancer cell lines stably expressing MIST1 with red fluorescent protein (RFP)-tagged pepsinogen C, a key secretory product of ZCs. Those cells upregulate expression of RAB26 and RAB3D to form large secretory granules, whereas control, non-MIST1-expressing cells do not. Moreover, granule formation in MIST1-expressing cells requires RAB activity because treatment with a RAB prenylation inhibitor and transfection of dominant negative RAB26 abrogate granule formation. Together, our data establish the molecular process by which a transcription factor can directly induce fundamental cellular architecture changes by increasing transcription of specific cellular effectors that act to organize a unique subcellular compartment.