The Na⁺/H⁺ exchanger isoform-3 plays a key role in coupled electroneutral NaCl absorption in the mammalian intestine. Reduced NHE3 expression or function has been implicated in the pathogenesis of diarrhea associated with IBD or enteric infections. Our previous studies revealed transcriptional regulation of NHE3 by various agents such as TNF-, IFN- and butyrate involving the transcription factors SP1 and SP3. In silico analysis revealed that the NHE3 core promoter also contains a hepatocyte nuclear factor 4α (HNF4α) binding site that is evolutionarily conserved in several species suggesting that HNF4α has a role in NHE3 regulation. Nhe3 mRNA levels were reduced in intestine-specific Hnf4α-null mice. However, detailed mechanisms of NHE3 regulation by HNF4α are not known. We investigated the regulation of NHE3 gene expression by HNF4α in vitro in the human intestinal epithelial cell line C2BBe1, and in vivo in the intestine-specific Hnf4α-null (Hnf4α^IEpC) and control (Hnf4α^fl/fl) mice. HNF4α knockdown by siRNA in C2BBe1 cells significantly decreased NHE3 mRNA and NHE3 protein levels. Gel Mobility Shift and ChIP assays revealed that HNF4α directly interacts with the HNF4α motif in the NHE3 core promoter. Site-specific mutagenesis on the HNF4α motif decreased, whereas ectopic over expression of HNF4α increased NHE3 promoter activity. Further, loss of HNF4α in Hnf4α^IEpC mice decreased colonic Nhe3 mRNA and NHE3 protein levels. Our results demonstrate a novel role for HNF4α in basal regulation of NHE3 expression. These studies represent an important and novel target for therapeutic intervention in IBD-associated diarrhea.