The homeodomain is a 60-amino acid module which mediates critical protein-DNA and protein-protein interactions for a large family of regulatory proteins. We have used structure-based design to analyze the ability of the Oct-1 homeodomain to nucleate an enhancer complex. The Oct-1 protein regulates herpes simplex virus (HSV) gene expression by participating in the formation of a multiprotein complex (C1 complex) which regulates alpha (immediate early) genes. We recently described the design of ZFHD1, a chimeric transcription factor containing zinc fingers 1 and 2 of Zif268, a four-residue linker, and the Oct-1 homeodomain. In the presence of alpha-transinduction factor and C1 factor, ZFHD1 efficiently nucleates formation of the C1 complex in vitro and specifically activates gene expression in vivo. The sequence specificity of ZFHD1 recruits C1 complex formation to an enhancer element which is not efficiently recognized by Oct-1. ZFHD1 function depends on the recognition of the Oct-1 homeodomain surface. These results prove that the Oct-1 homeodomain mediates all the protein-protein interactions that are required to efficiently recruit alpha-transinduction factor and C1 factor into a C1 complex. The structure-based design of transcription factors should provide valuable tools for dissecting the interactions of DNA-bound domains in other regulatory circuits.