Acts as a transcriptional activator by binding to an A/T-rich sequence, the FLAT element, in the insulin gene promoter. Required for development of the roof plate and, in turn, for specification of dorsal cell fates in the CNS and developing vertebrae. Defects in Lmx1a are the cause of the spontaneous neurologic mutant mouse, called 'dreher' (dr) and results from a failure of the roof plate to develop.