Small heterodimer partner (SHP; NR0B2) is an atypical orphan nuclear receptor and acts as a coregulator of various nuclear receptors. Herein, we examined a novel cross talk between SHP and a forkhead transcription factor HNF3 (hepatocyte nuclear factor 3/Foxa. Transient transfection assay demonstrated that SHP inhibited the transcriptional activity of all three isoforms of HNF3, HNF3α, β, and γ. In vivo and in vitro protein interaction studies showed that SHP physically interacted with HNF3. Adenovirus-mediated overexpression of SHP significantly decreased the mRNA levels of glucose-6-phosphase (G6Pase), cholesterol 7-α-hydroxylase (CYP7A1), and phosphoenolpyruvate carboxykinase (PEPCK) in HepG2 cells and rat primary hepatocytes. Moreover, the mRNA level of G6Pase was notably increased by down-regulation of SHP with small interfering RNA. Interestingly, HNF3 transactivity was still repressed by SHPΔ128–139 that fails to repress nuclear receptors. Mapping of interaction domain revealed that SHP interacted with forkhead DNA binding domain of HNF3α. Gel mobility shift and chromatin immunoprecipitation assays demonstrated that SHP inhibits DNA binding of HNF3. These results suggest that SHP is involved in the regulation of G6Pase, CYP7A1, and PEPCK gene expression via novel mechanism of inhibition of HNF3 activity and expand the role of SHP as a coregulator of other family of transcription factors in addition to nuclear receptors.