Expression of the proendocrine factor Neurogenin3 determines which progenitor cells in the developing pancreas will differentiate into the endocrine cells of the islets of Langerhans. To better understand how Neurogenin3 directs endocrine differentiation, we examined the mechanisms by which Neurogenin3 regulates the promoters of three transcription factor genes expressed in endocrine precursor cells: the nkx2.2 gene, the PAX4 gene, and the NEUROG3 gene, the human gene encoding Neurogenin3 itself. The function of all three promoters depends on at least one critical E box, a common DNA sequence that forms a binding site for basic helix-loop-helix proteins like Neurogenin3. Neurogenin3 bound to and effectively activated transcription through the nkx2.2 and PAX4 E boxes. In contrast, Neurogenin3 strongly repressed the NEUROG3 promoter, although a proximal E box was required for activity in the absence of Neurogenin3, suggesting that a ubiquitous transcriptional activator may bind to this site, and that Neurogenin3 could act as a competitive inhibitor of this activator. This hypothesis was supported by the lack of evidence for significant intrinsic transcriptional repression capacity in the Neurogenin3 protein, and by the ability of isolated DNA-binding basic helix-loop-helix domains to repress the NEUROG3 promoter. Neurogenin3 produced additional repression, however, when the protein included an intact transcriptional activation domain, suggesting that it may also induce the expression of a downstream transcriptional repressor. In summary, while Neurogenin3 orchestrates islet cell differentiation by activating islet cell transcription factor genes, it simultaneously represses its own promoter.