During embryonic development, the aristaless-type homeodomain protein Alx3 is expressed in the forehead mesenchyme and contributes to the regulation of craniofacial development. In the adult, Alx3 is expressed in pancreatic islets where it participates in the control of glucose homoeostasis. In the present study, we investigated the transcriptional regulation of Alx3 gene expression in these two cell types. We found that the Alx3 promoter contains two E-box regulatory elements, named EB1 and EB2, that provide binding sites for the basic helix–loop–helix transcription factors Twist1, E47, USF (upstream stimulatory factor) 1 and USF2. In primary mouse embryonic mesenchymal cells isolated from the forehead, EB2 is bound by Twist1, whereas EB1 is bound by USF1 and USF2. Integrity of both EB1 and EB2 is required for Twist1-mediated transactivation of the Alx3 promoter, even though Twist1 does not bind to EB1, indicating that binding of USF1 and USF2 to this element is required for Twist1-dependent Alx3 promoter activity. In contrast, in pancreatic islet insulin-producing cells, the integrity of EB2 is not required for proximal promoter activity. The results of the present study indicate that USF1 and USF2 are important regulatory factors for Alx3 gene expression in different cell types, whereas Twist1 contributes to transcriptional transactivation in mesenchymal, but not in pancreatic, cells.