The α 1-fetoprotein (AFP) gene is located between the albumin and α-albumin genes and is activated by transcription factor FTF (fetoprotein transcription factor), presumed to transduce early developmental signals to the albumin gene cluster. We have identified FTF as an orphan nuclear receptor of the Drosophila FTZ-F1 family. FTF recognizes the DNA sequence 5′-TCAAGGTCA-3′, the canonical recognition motif for FTZ-F1 receptors. cDNA sequence homologies indicate that rat FTF is the ortholog of mouse LRH-1 and Xenopus xFF1rA. Rodent FTF is encoded by a single-copy gene, related to the gene encoding steroidogenic factor 1 (SF-1). The 5.2-kb FTF transcript is translated from several in-frame initiator codons into FTF isoforms (54 to 64 kDa) which appear to bind DNA as monomers, with no need for a specific ligand, similar K d s (≂ 3× 10− 10 M), and similar transcriptional effects. FTF activates the AFP promoter without the use of an amino-terminal activation domain; carboxy-terminus-truncated FTF exerts strong dominant negative effects. In the AFP promoter, FTF recruits an accessory trans-activator which imparts glucocorticoid reactivity upon the AFP gene. FTF binding sites are found in the promoters of other liver-expressed genes, some encoding liver transcription factors; FTF, liver α 1-antitrypsin promoter factor LFB2, and HNF-3β promoter factor UF2-H3β are probably the same factor. FTF is also abundantly expressed in the pancreas and may exert differentiation functions in endodermal sublineages, similar to SF-1 in steroidogenic tissues. HepG2 hepatoma cells seem to express a mutated form of FTF.