The tissue-specific transcription factors, HNF1 alpha and HNF1 beta, are two closely related homeodomain proteins that are conserved throughout vertebrate evolution. Heterozygous mutations in the human HNF1beta and HNF1alpha genes are linked to maturity onset diabetes of the young (MODY), but mutated HNF1beta is also associated with kidney malformations. Consistent with this, it has been demonstrated that overexpression of HNF1beta in Xenopus embryos leads to defective pronephric development and agenesis of the pronephros, while HNF1alpha has no effect on kidney development. The regions in the HNF1beta protein responsible for this functional difference were defined in transfected HeLa cells as well as in injected Xenopus embryos. Using domain swapping experiments a nuclear localization signal was localized in the POUH domain of HNF1beta. The POUS and POUH domains of HNF1beta also were responsible for the most of the transactivation activity in transfected cells. In injected Xenopus embryos, three HNF1beta domains are involved in nephrogenesis. These include the dimerization domain, the 26 aa segment specific for splice variant A as well as the POUH domain. HNF1beta together with Pax8 and lim1 constitute the earliest regulators in the pronephric anlage. Overexpression of lim1 together with Pax8 in Xenopus embryos led to an enlarged pronephros with ectopic pronephric structures. In an effort to evaluate whether HNFbeta antagonizes the nephrogenic effect of lim1 and Pax8, all three transcription factors were coinjected into Xenopus embryos. The data shown here that HNF1beta can overcome the enlargement and the induction of an ectopic pronephros mediated by overexpression of Pax8 and lim1. But the phenotype induced by Pax8 and lim1 overexpression and characterized by cyst-like structures and thickening of the pronephric tubules was not altered by HNF1beta overexpression. Taken together, HNF1beta acts antagonistically to Pax8 and lim1 in only some processes during nephrogenesis, and a simple antagonistic relationship does not completely describe the functions of these genes. I conclude that HNF1beta has some distinct morphogenetic properties during nephrogenesis.