It is widely accepted that the specific actions of transcriptional regulatory proteins are mediated through their selective association with other protein factors. Such interactions allow transcription factors to distinguish relevant target sequences from the many fortuitous binding sites in the genome and confer highly precise transcriptional regulatory properties. Selective protein-protein interactions are thought to be particularly important for specifying the actions of homeodomaincontaining transcriptional regulatory proteins. Homeoproteins are notorious for their promiscuous DNA binding specificities, which contrast with their highly selective biological functions. It is therefore presumed that specificity is achieved through their interactions with other protein factors. Protein-protein interactions are likely to be particularly important for specifying the transcriptional activities of Msx homeoproteins. The murine Msx family includes three members, two of which (Msx1 and Msx2) have been well characterized with respect to their DNA binding and transcriptional properties (3-5, 40, 43) and one of which (Msx3) has been recently described (14, 33). The homeodomain sequences of Msx proteins are highly conserved (Ͼ90%), and Msx proteins also share several other conserved features, including nearly identical sequences that flank the homeodomain (the extended homeodomain [EHD]) and three other regions of similarity located N terminal and C terminal of the homeodomain (Msx homology regions) (see Fig. 1). In addition, the DNA binding specificities of Msx1 and Msx2 are virtually identical, and both proteins function as transcriptional repressors (4, 40). Moreover, Msx1 and Msx2 share an unusual feature in which repression is mediated through interactions with other protein factors rather than binding to homeodomain DNA sites (4,5,43). Therefore, the Msx1 homeodomain interacts directly with the TATA-binding protein (TBP), and the residues in the homeodomain that mediate this interaction are also required for repression by Msx1 (43). However, the ability of Msx proteins to regulate specific target genes undoubtedly requires additional, as yet undefined, interactions with protein factors that exhibit tissuerestricted expression and promoter-specific activities.The embryonic expression patterns of Msx genes, as well as the phenotypic consequences of targeted disruption of Msx1, are consistent with a role for Msx proteins in inductive signaling between epithelial and mesenchymal tissues. Msx genes are expressed primarily in regions of epithelial-mesenchymal interactions, such as the limb bud, tooth, heart, and neural tube (2,4,6,9,13,18,22,23,25,31), and targeted disruption of Msx1 leads to significant defects in the development of craniofacial structures (32). Moreover, a role for Msx proteins in active morphogenesis is further suggested by the lack of Msx1 expression in cells undergoing terminal differentiation (35,40) and by the restricted expression of Msx1 transcripts during periods of rapid cellular proliferatio...