NeuroD1/BETA2 is a key regulator of pancreatic islet morphogenesis and insulin hormone gene transcription in islet beta cells. This factor also appears to be involved in neurogenic differentiation, because NeuroD1/BETA2 is able to induce premature differentiation of neuronal precursors and convert ectoderm into fully differentiated neurons upon ectopic expression in Xenopus embryos. We have identified amino acid sequences in mammalian and Xenopus NeuroD1/BETA2 that are necessary for insulin gene expression and ectopic neurogenesis. Our results indicate that evolutionarily conserved sequences spanning the basic helix-loop-helix (amino acids [aa] 100 to 155) and C-terminal (aa 156 to 355) regions are important for both of these processes. The transactivation domains (AD1, aa 189 to 299; AD2, aa 300 to 355) were within the carboxy-terminal region, as analyzed by using GAL4:NeuroD1/BETA2 chimeras. Selective activation of mammalian insulin gene enhancer-driven expression and ectopic neurogenesis in Xenopus embryos was regulated by two independent and separable domains of NeuroD1/BETA2, located between aa 156 to 251 and aa 252 to 355. GAL4:NeuroD1/BETA2 constructs spanning these sequences demonstrated that only aa 252 to 355 contained activation domain function, although both aa 156 to 251 and 300 to 355 were found to interact with the p300/CREB binding protein (CBP) coactivator. These results implicate p300/CBP in NeuroD1/BETA2 function and further suggest that comparable mechanisms are utilized to direct target gene transcription during differentiation and in adult islet beta cells.