The type 1 carbohydrate chain, Galbeta1-3GlcNAc, is synthesized by UDP-galactose:beta-N-acetylglucosamine beta1,3-galactosyltransferase (beta3Gal-T). Among six beta3Gal-Ts cloned to date, beta3Gal-T5 is an essential enzyme for the synthesis of type 1 chain in epithelium of digestive tracts or pancreatic tissue. It forms the type 1 structure on glycoproteins produced from such tissues. In the present study, we found that the transcriptional regulation of the beta3Gal-T5 gene is controlled by homeoproteins, i.e. members of caudal-related homeobox protein (Cdx) and hepatocyte nuclear factor (HNF) families. We found an important region (-151 to -121 from the transcription initiation site), named the beta3Gal-T5 control element (GCE), for the promoter activity. GCE contained the consensus sequences for members of the Cdx and HNF families. Mutations introduced into this sequence abolished the transcriptional activity. Four factors, Cdx1, Cdx2, HNF1alpha, and HNF1beta, could bind to GCE and transcriptionally activate the beta3Gal-T5 gene. Transcriptional regulation of the beta3Gal-T5 gene was consistent with that of members of the Cdx and HNF1 families in two in vivo systems. 1) During in vitro differentiation of Caco-2 cells, transcriptional up-regulation of beta3Gal-T5 was observed in correlation with the increase in transcripts for Cdx2 and HNF1alpha. 2) Both transcript and protein levels of beta3Gal-T5 were determined to be significantly reduced in colon cancer. This down-regulation was correlated with the decrease of Cdx1 and HNF1beta expression in cancer tissue. This is the first finding that a glycosyltransferase gene is transcriptionally regulated under the control of homeoproteins in a tissue-specific manner. beta3Gal-T5, controlled by the intestinal homeoproteins, may play an important role in the specific function of intestinal cells by modifying the carbohydrate structure of glycoproteins.