The microphthalmia transcription factor/transcription factor E (MITF-TFE) family of basic helix-loop-helix leucine zipper (bHLH-Zip) transcription factors includes four family members: MITF, TFE3, TFEB and TFEC. The TEF3 protein encoded by this gene activates transcription through binding to the muE3 motif of the immunoglobulin heavy-chain enhancer. The TFEC protein forms heterodimers with the TEF3 protein and inhibits TFE3-dependent transcription activation. The TEF3 protein interacts with transcription regulators such as E2F3, SMAD3, and LEF-1, and is involved in TGF-beta-induced transcription, playing important roles in cell growth, proliferation, and osteoclast and macrophage differentiation. The TFE3 protein also activates hepatic IRS-2 gene, and induces hexokinase II (HK2) and insulin-induced gene 1 (INSIG1)\; it participates in insulin signaling and could be a therapeutic target for diabetes. This gene is also involved in chromosomal translocations, resulting in different fusion gene products in papillary renal cell carcinomas and alveolar soft part sarcomas, such as PRCC-TFE3, RCC17-TFE3, PSF-TFE3, NonO (p54nrb)-TFE3 and ASPL-TFE3.