SLC26A3 (Down Regulated in Adenoma, DRA) plays a key role in mammalian intestinal NaCl absorption via mediating apical membrane Cl^-/HCO₃^- exchange. DRA function and expression are significantly decreased in diarrhea associated with inflammatory bowel diseases (IBD). DRA is also considered to be a marker of cellular differentiation, and is predominantly expressed in differentiated epithelial cells. Caudal type homeobox protein-2 (CDX2) is known to regulate genes involved in intestinal epithelial differentiation and proliferation. Reduced expression of both DRA and CDX2 in intestinal inflammation prompted us to study whether DRA gene is directly regulated by CDX2. Our initial studies utilizing CDX2 knockout (CDX2^fV/fV; Cre⁺) mice showed marked reduction in DRA mRNA and protein levels in the proximal and distal colon. In silico analysis of DRA promoter showed 2 consensus sites for CDX2 binding. Therefore, we utilized Caco-2 cells as an in vitro model to examine if DRA is a direct target of CDX2 regulation. siRNA-mediated silencing of CDX2 in Caco2 cells resulted in a marked (~ 50%) decrease in DRA mRNA and protein levels, whereas ectopic over-expression of CDX2 upregulated DRA expression and also stimulated DRA promoter activity suggesting transcriptional regulation. EMSA and ChIP assays demonstrated direct binding of CDX2 to one of the two putative CDX2 binding sites in the DRA promoter (+645/+663). In summary, our studies, for the first time, demonstrated transcriptional regulation of DRA expression by CDX2 implicating that reduced expression of DRA in IBD-associated diarrhea may partly be due to downregulation of CDX2 in the inflamed mucosa.