The dichotomy between cellular differentiation and proliferation is a fundamental aspect of both normal development and tumor progression; however, the molecular basis of this opposition is not well understood. To address this issue, we investigated the mechanism by which the nuclear receptor hepatocyte nuclear factor 4alpha1 (HNF4alpha1) regulates the expression of the human cyclin-dependent kinase inhibitor gene p21/WAF1 (CDKN1A). We found that HNF4alpha1, a transcription factor that plays a central role in differentiation in the liver, pancreas, and intestine, activates the expression of p21 primarily by interacting with promoter-bound Sp1 at both the proximal promoter region and at newly identified sites in a distal region (-2.4 kb). Although HNF4alpha1 also binds two additional regions containing putative HNF4alpha binding sites, HNF4alpha1 mutants deficient in DNA binding activate the p21 promoter to the same extent as wild-type HNF4alpha1, indicating that direct DNA binding by HNF4alpha1 is not necessary for p21 activation. We also observed an in vitro and in vivo interaction between HNF4alpha1 and c-Myc as well as a competition between these two transcription factors for interaction with promoter-bound Sp1 and regulation of p21. Finally, we show that c-Myc competes with HNF4alpha1 for control of apolipoprotein C3 (APOC3), a gene associated with the differentiated hepatic phenotype. These results suggest a general model by which a differentiation factor (HNF4alpha1) and a proliferation factor (c-Myc) may compete for control of genes involved in cell proliferation and differentiation.