The yeast a1 and alpha 2 proteins are examples of homeodomain proteins that display cell-type-specific expression. They are co-expressed in only one type of cell, the a/alpha cell, where they repress the expression of a group of target genes. Using purified proteins, we demonstrate that a1 and alpha 2 form a highly specific DNA-binding activity, which recognizes an operator found upstream of each target gene. These proteins interact with DNA to form a ternary complex in which both a1 and alpha 2 contact the DNA through their respective homeodomains. An alpha 2 homodimer can recognize the same operator as the a1/alpha 2 heterodimer, but the affinity and specificity of the alpha 2 homodimer for DNA are much weaker than those of the a1/alpha 2 heterodimer. This difference results in part from the fact that the heterodimer is formed using a set of protein-protein contacts that is distinct from those that form the alpha 2/alpha 2 homodimer. Although a1 contacts DNA in the presence of alpha 2, it does not on its own bind DNA specifically, even at very high concentrations. These results suggest that the dimerization of heterologous partners can produce a DNA-binding activity that is not a simple hybrid of the known properties of each constituent.