The orphan nuclear receptor HNF4alpha and the LIM homeodomain factor Isl1 are co-expressed in pancreatic beta-cells and are required for the differentiation and function of these endocrine cells. HNF4alpha activates numerous genes and mutations in its gene are associated with maturity onset diabetes of the young. Cofactors and transcription factors that interact with HNF4alpha are crucial to modulate its transcriptional activity, since the latter is not regulated by conventional ligands. These transcriptional partners interact mainly through the HNF4alpha AF-1 module and the ligand binding domain, which contains the AF-2 module. Here, we showed that Isl1 could enhance the HNF4alpha-mediated activation of transcription of the HNF1alpha, PPARalpha and insulin I promoters. Isl1 interacted with the HNF4alpha AF-2 but also required the HNF4alpha carboxy-terminal F domain for optimal interaction and transcriptional synergy. More specifically, we found that naturally occurring HNF4alpha isoforms, differing only in their F domain, exhibited different abilities to interact and synergize with Isl1, extending the crucial transcriptional modulatory role of the HNF4alpha F domain. HNF4alpha interacted with both the homeodomain and the first LIM domain of Isl1. We found that the transcriptional synergy between HNF4alpha and Isl1 involved an increase in HNF4alpha loading on promoter. The effect was more pronounced on the rat insulin I promoter containing binding sites for both HNF4alpha and Isl1 than on the human HNF1alpha promoter lacking an Isl1 binding site. Moreover, Isl1 could mediate the recruitment of the cofactor CLIM2 resulting in a further transcriptional enhancement of the HNF1alpha promoter activity.