Hepassocin (HPS), is a liver-specific gene with mitogenic activity on isolated hepatocytes. It is up-regulated following partial hepatectomy and down-regulated frequently in heptocellular carcinoma (HCC). However, very little is known about the HPS transcription regulation mechanism. In this study, we identified HNF1alpha (hepatocyte nuclear factor-1alpha) as an important liver-specific cis-acting element for HPS using in vivo luciferase assays. Deletion of the HNF1 binding site not only led to a complete loss of HPS promoter activity in vivo but also abolished the induction of the HPS promoter by HNF1alpha. An electrophoretic mobility shift assay demonstrated that HNF1alpha interacted with the HPS gene promoter in vitro. Chromatin immunoprecipitation showed that HNF1alpha interacted with HMGB1 and CREB-binding protein, and all of them were recruited to the HPS promoter in vivo. Moreover, HNF1alpha expression was lower in HCC cell lines and tissues and correlated significantly with the down-regulation of HPS expression. Re-expression of HNF1alpha in human hepatoma HepG2 cells reinduced HPS expression. In contrast, knockdown of endogenous HNF1alpha expression by small interfering RNA resulted in a significant reduction of HPS expression. Furthermore, we found that partial hepatectomy and IL-6 significantly induced promoter activity of HPS, depending on STAT3 and HNF1 binding sites in the HPS promoter. These results demonstrate that the HNF1 binding site and HNF1alpha are critical to liver-specific expression of HPS, and down-regulation or loss of HNF1alpha causes, at least in part, the transcriptional down-regulation of HPS in HCC.