Csx/Nkx2.5 is an evolutionarily conserved homeodomain (HD)-containing transcription factor that is essential for early cardiac development. We found that the HD of Csx/Nkx2.5 binds as a monomer as well as a dimer to its DNA binding sites in the promoter of the atrial natriuretic factor (ANF) gene, an in vivo target gene of Csx/Nkx2.5. Csx/Nkx2.5 physically interacts with each other in vitro as well as in cells, and the HD is critical for homodimerization. Lys(193) and Arg(194), located at the COOH-terminal end of HD, are essential for dimerization. Lys(193) is also required for a specific interaction with the zinc finger transcription factor GATA4. Csx/Nkx2.5 can heterodimerize with other NK2 homeodomain proteins, Nkx2.3 and Nkx2.6/Tix, with different affinities. A single missense mutation, Ile(183) to Pro in the HD of Csx/Nkx2.5, preserved homodimerization function, but totally abolished DNA binding. Ile(183) --> Pro mutant acts in an inhibitory manner on wild type Csx/Nkx2.5 transcriptional activity through the ANF promoter in 10T1/2 cells. However, Ile(183) --> Pro mutant does not inhibit wild type Csx/Nkx2.5 function on the ANF promoter in cultured neonatal cardiac myocytes, possibly due to failure of dimerization in the presence of the target DNA. These results suggest that complex protein-protein interactions of Csx/Nkx2.5 play a role in its transcriptional regulatory function.