Transcription of the rat fatty acid synthase (FAS) gene in the rat liver can be regulated by feeding a high carbohydrate diet. A carbohydrate response element (ChoRE) located on the rat FAS gene promoter has been identified. Using multiple copies of the ChoRE as the bait in a yeast one-hybrid system, a rat liver cDNA library was screened, and the cDNA of ChoRE-binding proteins was cloned. A positive clone that encodes a basic helix-loop-helix protein, enhancer of split- and hairy-related protein-2 (SHARP-2), was obtained. Northern blot analysis revealed that the levels of SHARP-2 mRNA increase when a high carbohydrate diet is fed to normal rats or when insulin is administered to diabetic rats. In primary cultured rat hepatocytes, insulin rapidly induced an accumulation of SHARP-2 mRNA even in the absence of glucose. A time course for the increase in SHARP-2 mRNA levels indicated that it followed by those of FAS and L-type pyruvate kinase mRNAs and that the initial time course of SHARP-2 mRNA was similar to changes in the levels of glucokinase mRNA and phosphoenolpyruvate carboxykinase mRNA. Although wortmannin, LY294002, and actinomycin D blocked the increase in SHARP-2 mRNA levels by insulin, rapamycin, staurosporine, PD98059, okadaic acid, and 8-bromocyclic AMP had no effect. In addition, nuclear run-on assay revealed that transcription of the rat SHARP-2 gene was induced by insulin. Thus, we conclude that insulin induces the transcription of the rat SHARP-2 gene via a phosphoinositide 3-kinase pathway.