TFE3 is a DNA-binding protein that activates transcription through the muE3 site of the immunoglobulin heavy-chain enhancer. Its amino acid sequence reveals two putative protein dimerization motifs: a helix-loop-helix (HLH) and an adjacent leucine zipper. We show here that both of these motifs are necessary for TFE3 to homodimerize and to bind DNA in vitro. Using a dominant negative TFE3 mutant, we also demonstrate that both the HLH and the leucine zipper motifs are necessary and sufficient for protein-protein interactions in vivo. TFE3 is unable to form stable heterodimers with a variety of other HLH proteins, including USF, a protein that is structurally similar to TFE3 and binds a common DNA sequence. The analysis of "zipper swap" proteins in which the TFE3 HLH was fused to the leucine zipper region of USF indicates that dimerization specificity is mediated entirely by the identity of the leucine zipper and its position relative to the HLH. Hence, in this "b-HLH-zip" class of proteins, the leucine zipper functions in concert with the HLH both to stabilize protein-protein interactions and to establish dimerization specificity.