In obesity, elevated insulin causes fatty liver by activating the gene encoding SREBP-1c, a transcription factor that enhances fatty acid synthesis. Two transcription factors, LXRα and C/EBPβ, are necessary but not sufficient for insulin induction of hepatic SREBP-1c mRNA. Here, we show that a third transcription factor, BHLHE40, is required. Immunoprecipitation revealed that BHLHE40 binds to C/EBPβ and LXRα in livers of rats that had fasted and then refed. Hepatic BHLHE40 mRNA rises rapidly when fasted rats are refed and when rat hepatocytes are incubated with insulin. Preventing this rise by gene knockout in mice or siRNAs in hepatocytes reduces the insulin-induced rise in SREBP-1c mRNA. Although BHLHE40 is necessary for insulin induction of SREBP-1c, it is not sufficient as demonstrated by failure of lentiviral BHLHE40 overexpression to increase hepatocyte SREBP-1c mRNA in the absence of insulin. Thus, an additional event is required for insulin to increase SREBP-1c mRNA.