Transcription factors (TF) regulate gene activity in eukaryotic cells by binding specific regions of genomic DNA. In fungi, the most abundant TF class contains a fungal-specific ‘GAL4-like’ Zn2C6 DNA binding domain (DBD), while the second class contains another fungal-specific domain, known as ‘fungal_trans’ or Middle Homology Domain (MHD), whose function remains largely uncharacterized. Remarkably, almost a third of MHD-containing TF in public sequence databases apparently lack DNA binding activity, since they are not predicted to contain a DBD. Here, we reassess the domain organization of these ‘MHD-only’ proteins using an in silico error-aware approach. Our large-scale analysis of ~17000 MHD-only TF sequences showed that the vast majority (>90%) result from gene annotation errors, thus contradicting previous findings that the MHD-only TF are widespread in fungi. We show that they are in fact exceptional cases, and that the Zn2C6-MHD domain pair represents the canonical domain signature defining a new TF family composed of two fungal-specific domains. We call this family CeGAL, after the most characterized members: Cep3, whose 3D structure has been determined and GAL4, an archetypal eukaryotic TF. This definition should improve the classification of the Zn2C6 TF and provide critical insights into fungal gene regulatory networks.