Hepatocyte nuclear factor-6 (HNF-6) contains a single cut domain and a homeodomain characterized by a phenylalanine at position 48 and a methionine at position 50. We describe here two isoforms of HNF-6 which differ by the linker that separates these domains. Both isoforms stimulated transcription. The affinity of HNF-6alpha and HNF-6beta for DNA differed, depending on the target sequence. Binding of HNF-6 to DNA involved the cut domain and the homeodomain, but the latter was not required for binding to a subset of sites. Mutations of the F48M50 dyad that did not affect DNA binding reduced the transcriptional stimulation of constructs that do not require the homeodomain for DNA binding, but did not affect the stimulation of constructs that do require the homeodomain. Comparative trees of mammalian, Drosophila, and Caenorhabditis elegans proteins showed that HNF-6 defines a new class, which we call ONECUT, of homeodomain proteins. C. elegans proteins of this class bound to HNF-6 DNA targets. Thus, depending on their sequence, these targets determine for HNF-6 at least two modes of DNA binding, which hinge on the homeodomain and on the linker that separates it from the cut domain, and two modes of transcriptional stimulation, which hinge on the homeodomain.