Hepatocyte nuclear factor 4alpha (HNF4alpha) regulates the expression of many genes preferentially expressed in liver. HNF4alpha-null mice die during embryogenesis precluding the analysis of its function in the adult. To circumvent this problem, liver-specific HNF4alpha-null mice were produced. Mice lacking hepatic HNF4alpha expression exhibited increased serum ammonia and reduced serum urea. This disruption in ureagenesis may be explained by a marked decrease in expression and activity of hepatic ornithine transcarbamylase (OTC). To determine the molecular mechanisms involved in transcriptional regulation of the mouse OTC gene, the OTC promoter region was analyzed. Sequence analysis revealed the presence of two putative HNF4alpha-binding sites in the mouse OTC promoter region. By using transient transfection analysis, it was established that high levels of promoter activity were dependent on both HNF4alpha-binding sites and the expression of HNF4alpha. Furthermore, the proximal HNF4alpha-binding site was found to be more important than the distal one for transactivating OTC promoter. These data demonstrate that HNF4alpha is critical for urea homeostasis by direct regulation of the OTC gene in vivo.