In the mouse insulin is first detected on embryonic day 12 (e12) in a subpopulation of the cells that on e10 start to produce glucagon. During the continued embryonic development, the number of cells that coexpress the two hormones is gradually decreased, and in adults the expression of these two hormone genes is segregated to the beta- and alpha-cells. To begin to understand the process of terminal differentiation that restricts insulin gene expression to beta-cells, we have assayed for the presence of nuclear proteins that interact with transcriptional regulatory sequences of the rat insulin I gene in pancreatic alpha- and beta-cell lines. All except one of the previously identified insulin enhancer-binding proteins were found to be present in both cell types. A new insulin promoter-binding protein, IPF1, which was present in beta-cells but absent in alpha-cells, was identified. The beta-cell specificity of IPF1 implies that the insulin promoter is involved in the restriction of insulin gene expression to the beta-cells. The binding sites for IPF1 and the beta-cell-specific enhancer-binding protein IEF2 are both recognized by the previously isolated homeodomain-containing LIM protein isl-1, but these three proteins were all shown to be different entities.