The G protein-coupled free fatty acid receptor-1 (FFA1/GPR40) plays a major role in the regulation of insulin secretion by fatty acids. GPR40 is considered a potential therapeutic target to enhance insulin secretion in type 2 diabetes; however, its mode of regulation is essentially unknown. The aims of this study were to test the hypothesis that glucose regulates GPR40 gene expression in pancreatic β-cells and to determine the mechanisms of this regulation. We observed that glucose stimulates GPR40 gene transcription in pancreatic β-cells via increased binding of pancreas-duodenum homeobox-1 (Pdx-1) to the A-box in the HR2 region of the GPR40 promoter. Mutation of the Pdx-1 binding site within the HR2 abolishes glucose activation of GPR40 promoter activity. The stimulation of GPR40 expression and Pdx-1 binding to the HR2 in response to glucose are mimicked by N-acetyl glucosamine, an intermediate of the hexosamine biosynthesis pathway, and involve PI3K-dependent O-GlcNAcylation of Pdx-1 in the nucleus. We demonstrate that O-GlcNAc transferase (OGT) interacts with the product of the PI3K reaction, phosphatidylinositol 3,4,5-trisphosphate (PIP(3)), in the nucleus. This interaction enables OGT to catalyze O-GlcNAcylation of nuclear proteins, including Pdx-1. We conclude that glucose stimulates GPR40 gene expression at the transcriptional level through Pdx-1 binding to the HR2 region and via a signaling cascade that involves an interaction between OGT and PIP(3) at the nuclear membrane. These observations reveal a unique mechanism by which glucose metabolism regulates the function of transcription factors in the nucleus to induce gene expression.