CDX2, a member of the caudal family of transcription factors, is involved in enterocyte lineage specification. CDX2 activates many intestine-specific genes, such as sucrase-isomaltase and lactase-phlorizin hydrolase (LPH), and adhesion proteins, namely, LI-cadherin and claudin-2. In this study, we show that the proprotein convertase furin, involved in proteolytic maturation of proprotein substrates including LPH and cell surface proteins, is a CDX2 target. Indeed, expression of the rat furin homolog was induced 1.5-fold, as determined by microarray experiments that compared control with CDX2-expressing intestinal epithelial cells (IEC-6). As determined by transient transfection assays in Caco-2/15 cells, the furin P1 promoter 1.3-kb fragment between SacI and NheI was essential for CDX2 transcriptional activation. Electrophoretic mobility shift/supershift assays followed by site-specific mutagenesis and chromatin immunoprecipitation identified the CDX DNA-binding site (CBS)2 sequence from nt -1827 to -1821 as the major CBS involved in furin P1 promoter activation. Increased furin mRNA and protein expression correlated with both CDX2 expression and intestinal epithelial cell differentiation. In addition, furin mRNAs were detected predominantly in differentiated epithelial cells of the villus, as determined by in situ hybridization. Treatment of Caco-2/15 cells with a furin inhibitor led to inhibition of LPH activity. Morphological differentiation of enterocyte-like features in Caco-2/15 such as epithelial cell polarity and brush-border formation were strongly attenuated by furin inhibition. These results suggest that CDX2 regulates furin expression in intestinal epithelial cells. Furin may be important in modulating the maturation and/or activation of key factors involved in enterocyte differentiation.