Pancreatic derived factor (PANDER) is a recently identified cytokine-like protein that is dominantly expressed in the islets of Langerhans of the pancreas. To investigate the mechanism of tissue-specific regulation of PANDER, we identified and characterized the promoter region. The transcriptional start site was identified 520 bp upstream of the translational start codon by 5'-RLM-RACE. Computer algorithms identified several islet-associated and glucose-responsive binding motifs that included A and E boxes, hepatocyte nuclear factors 1 and 4, Oct-1, and signal transducer and activator of transcription 3, and 5. Reporter gene analysis revealed cell type-specific PANDER promoter expression in islet and liver-derived cell lines. Levels of PANDER mRNA were directly concordant to the observed cell type-specific PANDER promoter gene expression. The minimal element was mapped to the 5'-UTR and located between +200 and +491 relative to the transcriptional start site and imparted maximal gene expression. In addition, several putative glucose-responsive binding sites were further functionally characterized to reveal critical regulatory elements of PANDER. The PANDER promoter was demonstrated to be glucose-responsive in a dose-dependent manner in murine insulinoma beta-TC3 cells and primary murine islets, but unresponsive in glucagon-secreting alpha-TC3 cells. Our findings revealed that the 5'-UTR of PANDER contains the minimal element for gene expression and imparts both tissue-specificity and glucose-responsiveness. The regulation of PANDER gene expression mimics that of insulin and suggests a potential biological function of PANDER involved in metabolic homeostasis.