Results show that smooth muscle-specific promoters represent novel downstream targets of the winged helix factor hepatocyte nuclear factor-3 homologue 1 (HFH-1). HFH-1 strongly represses telokin promoter activity when overexpressed in A10 vascular smooth muscle cells. HFH-1 was also found to repress transcription of several other smooth muscle-specific promoters, including the SM22alpha promoter. HFH-1 inhibits telokin promoter activity, by binding to a forkhead consensus site located within an AT-rich region of the telokin promoter. The DNA-binding domain alone was sufficient to mediate inhibition, suggesting that binding of HFH-1 blocks the binding of other positive-acting factors. HFH-1 does not disrupt serum response factor binding to an adjacent CArG box within the telokin promoter, implying that HFH-1 must compete with other unidentified trans-activators to mediate repression. The localization of HFH-1 mRNA to the epithelial cell layer of mouse bladder and stomach implicates HFH-1 in repressing telokin expression in epithelial cells. This suggests that cell-specific expression of telokin is likely mediated by both positive-acting factors in smooth muscle cells and negative-acting factors in nonmuscle cell types. We propose a model in which the smooth muscle specificity of the telokin promoter is regulated by interactions between positive- and negative-acting members of the hepatocyte nuclear factor-3/forkhead family of transcription factors.