Liver-enriched factor LFB1 (also named HNF1) is a dimeric transcription activator which is essential for the expression of many hepatocyte-specific genes. Here we demonstrate that LFB1 mutants in the POU A-like or in the homeo domains inhibit wild-type DNA binding by forming inactive heterodimeric complexes. Co-transfection of one of these mutants with wild-type LFB1 in HeLa cells eliminated LFB1 DNA binding and transcriptional activities through a trans-dominant mechanism. Expression of the same dominant negative mutant in human hepatoma HepG2 cells only partially inhibited endogenous LFB1 activity, due to stabilization of LFB1 dimers in these cells. Dimer stabilization in hepatoma cells is mediated by a heat-labile association with an 11kD polypeptide, analogous to the DCoH cofactor identified in rat liver by Mendel et al. (1). The property of stabilizing LFB1 dimers is also shared by HeLa cells which produce a HeLa homolog of DCoH. These results demonstrate that LFB1 dimer stabilization as well as the synthesis of 'stabilizing factors' are not restricted to cells expressing LFB1 or other members of its family.