We analyzed a mechanism of transcriptional regulation of the human insulin gene by cyclic AMP response element modulator (CREM) through four cyclic AMP response elements (CREs). We isolated two novel CREM isoforms (CREMDeltaQ1 and CREMDeltaQ2), which lack one of the glutamine-rich domains, Q1 and Q2 respectively, and six known isoforms (CREMtaualpha, CREMalpha, inducible cyclic AMP early repressor (ICER) I, ICER Igamma, CREM-17X, and CREM-17) from rat pancreatic islets and the RINm5F pancreatic beta-cell line. CREM isoforms functioned as efficient transcriptional activators or repressors to modulate insulin promoter activity by binding to all of the insulin CREs. The binding activity of repressors is higher than that of activators and suppressed not only basal activity but also activator-induced activities. Furthermore, CREM activator interacted directly with the transcription factor IID components hTAF(II)130 and TATA box-binding protein (TBP). These results suggest that the activation of the insulin gene transcription by CREM activator is mediated by not only direct binding to the CREs but also by recruiting transcription factor IID to the insulin promoter via its interaction with hTAF(II)130 and TBP. On the other hand, the CREM repressor ICER competitively interrupts the binding of the activators to CREs and does not interact with either TBP or hTAF(II)130; therefore, it might fail to stabilize the basal transcriptional machinery and repress transactivation.