Previously, we demonstrated that protein-DNA interactions at the drug response element (DRE) in the human apoA-I promoter were important for the induction of apoA-I gene expression by gemfibrozil. We now report the cloning and characterization of a DRE transactivating factor. The cloned protein is identical to the putative helicase and potential transcription factor human S mu binding protein-2 (HSmuBP2). It is also related to glial factor-1 (GF1), an incomplete version of HSmuBP2 lacking the first 494 and the last 128 amino acids. Gel mobility shift assays demonstrated that HSmuBP2 binds apoA-I DRE oligomers and forms a specific protein-DNA complex. Northern blot analysis showed that HSmuBP2 mRNA is expressed at various levels in a wide range of human tissues. Transient cotransfection experiments performed in HepG2 cells demonstrated that overexpression of HSmuBP2 or GF1 induced apoA-I proximal promoter activity by 3-fold and that the apoA-I DRE was necessary for transactivation. Additionally, we demonstrated that transactivation was increased a further 2- to 3-fold by exposing the cells to gemfibrozil. Together these observations indicate that HSmuBP2 acts as a transcription factor that regulates apoA-I gene expression in hepatoma cells and whose activity may be stimulated by gemfibrozil treatment.