The activity of the rat insulin I gene enhancer is mainly dependent on two cis-acting protein-binding domains. Here we report the isolation of a complementary DNA encoding a protein, Isl-1, that binds to one of these domains. Isl-1 contains a homeodomain with greatest similarity to those of the Caenorhabditis elegans proteins encoded by mec-3 and lin-11. In addition, Isl-1, like the lin-11 and mec-3 gene products, contains a novel Cys-His domain which is reminiscent of known metal-binding regions. Together these proteins define a novel class of proteins containing both a homeo- and a Cys His-domain. Isl-1 is preferentially expressed in cells of pancreatic endocrine origin. If the structural homologies between Isl-1 and the C. elegans gene products reflect functional similarities, a role for Isl-1 in the development of pancreatic endocrine cells could be envisaged.