Pax proteins are transcription factors that play an important role in the differentiation of several cell types. These proteins bind to specific DNA sequences through the paired domain. This evolutionarily conserved element is composed of two subdomains (PAI and RED), located at the N- and C-terminals, respectively. Due to the presence of these two subdomains, Pax proteins may recognize DNA in different modes, a possibility that has not been exhaustively explored yet. The C site of the thyroglobulin promoter is bound by the thyroid-specific transcription factor Pax-8. In this study we have characterized the mode by which the Pax-8 paired domain interacts with the C site. Results allow the identification of the respective positions of the PAI and RED subdomains when the full-length protein is bound to the C site. The binding of the isolated PAI and RED subdomains to the C site and to several related mutants was also evaluated. Both subdomains interact with DNA as a monomer and display a lower binding affinity than the full-length protein. Therefore, the Pax-8 paired domain-C site interaction occurs through a co-operation between the two subdomains. The binding properties of the PAI subdomain suggest that the co-operation between PAI and RED subdomains does not merely consist of the sum of contacts established by the single subdomain: the presence of the RED subdomain is necessary for correct DNA recognition by the PAI subdomain, thus accounting for a sort of chronology of events during DNA binding. Since the RED subdomain is much more variable than the PAI subdomain among Pax proteins, these results could explain how distinct Pax proteins may select different target genes.