TAL1 is a helix-loop-helix transcription factor that is essential for hematopoiesis. In vitro DNA binding site selection experiments have previously identified the preferred binding site for TAL1 heterodimers as AACAGATGGT. TAL1 homodimers do not bind DNA with significant affinity. A subset of other E-box sequences is also bound by TAL1 heterodimers. Here, we present an analysis of TAL1 heterodimer DNA binding specificity, using E-boxes derived from genomic clones, which were isolated by immunoadsorption of K562 erythroleukemia cell chromatin with a TAL1 antibody. We show that TAL1 heterodimer binding to a CAGATG E-box is strongly modulated by nucleotides flanking the E-box. A 10 base pair element consisting of the CAGATG E-box and two flanking nucleotides in both the 5' and 3' direction is sufficient for high-affinity binding. Certain mutations of nucleotides in either the 5' (-1 and -2) or 3' (+1 and +2) direction strongly inhibit binding. The importance of flanking nucleotides also exists in the context of nonpreferred E-boxes recognized by TAL1 heterodimers. Although there are no known target genes for TAL1, the regulatory regions of several genes involved in hematopoiesis contain the preferred E-box CAGATG. However, based on our results, the E-boxes in these potential target genes contain flanking sequences that would be expected to significantly reduce TAL1 heterodimer binding in vitro. Thus, additional stabilizing forces, such as protein-protein interactions between TAL1 heterodimers and accessory factors, may be required to confer high-affinity TAL1 heterodimer binding to such sequences.