Insulin upstream factor 1 (IUF1), a transcription factor present in pancreatic β-cells, binds to the sequence C(C/T)TAATG present at several sites within the human insulin promoter. Here we isolated and sequenced cDNA encoding human IUF1 and exploited it to identify the signal transduction pathway by which glucose triggers its activation. In human islets, or in the mouse β-cell line MIN6, high glucose induced the binding of IUF1 to DNA, an effect mimicked by serine/threonine phosphatase inhibitors, indicating that DNA binding was induced by a phosphorylation mechanism. The glucose- stimulated binding of IUF1 to DNA and IUF1-dependent gene transcription were both prevented by SB 203580, a specific inhibitor of stress-activated protein kinase 2 (SAPK2, also termed p38 mitogen-activated protein kinase, reactivating kinase, CSBP, and Mxi2) but not by several other protein kinase inhibitors. Consistent with this finding, high glucose activated mitogen- activated protein kinase-activated protein kinase 2 (MAPKAP kinase-2) (a downstream target of SAPK2) in MIN6 cells, an effect that was also blocked by SB 203580. Cellular stresses that trigger the activation of SAPK2 and MAPKAP kinase-2 (arsenite, heat shock) also stimulated IUF1 binding to DNA and IUF1- dependent gene transcription, and these effects were also prevented by SB 203580. IUF1 expressed in Escherichia coli was unable to bind to DNA, but binding was induced by incubation with MgATP, SAPK2, and a MIN6 cell extract, which resulted in the conversion of IUF1 to a slower migrating form. SAPK2 could not be replaced by p42 MAP kinase, MAPKAP kinase-2, or MAPKAP kinase- 3. The glucose-stimulated activation of IUF1 DNA binding and MAPKAP kinase-2 (but not the arsenite-induced activation of these proteins) was prevented by wortmannin and LY 294002 at concentrations similar to those that inhibit phosphatidylinositide 3-kinase. Our results indicate that high glucose (a cellular stress) activates SAPK2 by a novel mechanism in which a wortmannin/LY 294002-sensitive component plays an essential role. SAPK2 then activates IUF1 indirectly by activating a novel IUF1-activating enzyme.