Pax9 is a paired domain-containing transcription factor that plays an essential role in the patterning of murine dentition. In humans, mutations in PAX9 are associated with unique phenotypes of familial tooth agenesis that mainly involve posterior teeth. Among these, a frameshift mutation (219InsG) within the paired domain of PAX9 produces a protein product associated with a severe form of molar agenesis in a single family. The objectives of this study were to gain new insights into the molecular pathogenesis of the 219InsG mutation and its role in tooth agenesis. Here we describe functional defects in DNA binding and transactivation of mutant 219InsGPax9. Although wild type Pax9 binds to the high affinity paired domain recognition sequences, e5 and CD19-2(A-ins), the 219InsGPax9 mutant protein was unable to bind to these cognate DNA-binding sites. In co-transfection assays, wild type Pax9 activated reporter gene transcription although the mutant was transcriptionally inactive. Immunolocalization data show that Pax9 and 219InsGPax9 proteins are synthesized in mammalian cells but that the nuclear localization of the mutant Pax9 protein is altered. Furthermore, transactivation by the full-length Pax9 protein from paired domain binding sites was not impaired by the 219InsGPax9 mutant. The latter did not alter the DNA binding activities of wild type Pax9 in gel mobility shift assays. The combined defects in DNA binding activities and transactivation function of mutant 219InsGPAX9 likely alter the selective activation and/or repression of PAX9 effector genes during odontogenesis. This loss-of-function of PAX9 most likely results in its haploinsufficiency during the patterning of dentition and the subsequent loss of posterior teeth.