A new family of homeodomain proteins has recently been identified that includes extradenticle, ceh-20 and three mammalian proteins Pbx1, Pbx2 and Pbx3. We show here that two members of this family, Pbx1 and Pbx2 bind cooperatively to DNA with both Hoxb-7 and Hoxb-8. Engrailed-2 modulates the DNA binding activity of the Pbx proteins to a different target site. E2A-Pbx1, a chimeric Pbx1 gene product involved in pre-B acute lymphoblastoid leukemia, has retained its ability to interact with the Hox proteins. These data show that vertebrate Hox and Pbx gene products have the ability to bind cooperatively to DNA.