Lhx3 is a LIM homeodomain transcription factor essential for pituitary development and motor neuron specification in mice. We identified two isoforms of human Lhx3, hLhx3a and hLhx3b, which differ in their ability to trans-activate pituitary gene targets. These factors are identical within the LIM domains and the homeodomain, but differ in their amino-terminal sequences preceding the LIM motifs. Both isoforms are localized to the nucleus and are expressed in the adult human pituitary, but gene activation studies demonstrate characteristic functional differences. Human Lhx3a trans-activated the alpha-glycoprotein subunit promoter and a reporter construct containing a high-affinity Lhx3 binding site more effectively than the hLhx3b isoform. In addition, hLhx3a synergized with the pituitary POU domain factor, Pit-1, to strongly induce transcription of the TSHbeta-subunit gene, while hLhx3b did not. We demonstrate that the differences in gene activation properties between hLhx3a and hLhx3b correlate with their DNA binding to sites within these genes. The short hLhx3b-specific amino-terminal domain inhibits DNA binding and gene activation functions of the molecule. These data suggest that isoforms of Lhx3 may play distinct roles during development of the mammalian pituitary gland and other neuroendocrine systems.