Abnormalities in lipid metabolism have been proposed as contributing factors to both defective insulin secretion from the pancreatic beta cell and peripheral insulin resistance in type 2 diabetes. Previously, we have shown that prolonged exposure of isolated rat islets of Langerhans to excessive fatty acid levels impairs insulin gene transcription. This study was designed to assess whether palmitate alters the expression and binding activity of the key regulatory factors pancreas-duodenum homeobox-1 (PDX-1), MafA, and Beta2, which respectively bind to the A3, C1, and E1 elements in the proximal region of the insulin promoter. Nuclear extracts of isolated rat islets cultured with 0.5 mM palmitate exhibited reduced binding activity to the A3 and C1 elements but not the E1 element. Palmitate did not affect the overall expression of PDX-1 but reduced its nuclear localization. In contrast, palmitate blocked the stimulation of MafA mRNA and protein expression by glucose. Combined adenovirus-mediated overexpression of PDX-1 and MafA in islets completely prevented the inhibition of insulin gene expression by palmitate. These results demonstrate that prolonged exposure of islets to palmitate inhibits insulin gene transcription by impairing nuclear localization of PDX-1 and cellular expression of MafA.The prevalence of diabetes mellitus is increasing dramatically in Western countries, in part because of the increase in obesity. Type 2 diabetes mellitus, the most frequent form of the disease, is characterized by defective insulin secretion from the pancreatic beta cells and peripheral insulin resistance. According to the lipotoxicity hypothesis, abnormalities in lipid metabolism contribute to both defects (1) and in particular to the inexorable decline of beta cell function observed during the course of the disease (2). However, the mechanisms of lipotoxicity in the beta cell remain largely unknown.In vitro, prolonged exposure to excessive concentrations of fatty acids inhibits glucose-stimulated insulin secretion (3-7) and insulin gene expression (8 -11). Previous studies in our laboratory have shown that deleterious effects of fatty acids appear mediated by distinct mechanisms; whereas inhibition of insulin secretion is observed after culture with palmitate, oleate, and other fatty acids (7), insulin gene expression is only affected by palmitate and is mediated via de novo synthesis of ceramide (11). In isolated rat islets, we have shown that palmitate markedly blunts the activation by glucose of an insulin promoter reporter construct, indicating a transcriptional mode of action (11). However, the mechanisms by which palmitate affects the insulin promoter are unknown.Both beta cell-specific expression and metabolic regulation of the insulin gene are conferred by a highly conserved region lying ϳ340 bp upstream of the transcription initiation site that constitutes the promoter/enhancer region (12-14). The main glucose-responsive elements on the insulin promoter are the highly conserved A3 (15), C1 (16), and E1 (16) sites,...