HMG-D is one of the Drosophila counterparts of the vertebrate HMG1/2 class of abundant chromosomal proteins and contains three domains: an HMG domain followed by a basic region and a short acidic carboxyterminal tail. We show that the HMG domain of HMG-D does not bind to deformed DNA structures such as DNA bulges, cis-platinated DNA or four-way junctions but does bind tightly to DNA microcircles, suggesting that in vivo the natural ligands of this domain are tightly bent DNA loops. The flanking basic region substantially increases the DNA-binding activity of the HMG domain to DNA ligands other than microcircles. We demonstrate that the acidic tail alters the structural selectivity of DNA binding by increasing the affinity for deformed DNA and decreasing the affinity for linear B-DNA. Finally, we show that the acidic tail increases the efficiency of constraining preformed negative supercoils but conversely decreases the efficiency of supercoiling relaxed DNA in the presence of topoisomerase I.