Caenorhabditis elegans can serve as a model system to study telomere functions due to its similarity to higher organisms in telomere structures. We report here the identification of the nematode homeodomain protein CEH-37 as a telomere-binding protein using a yeast one-hybrid screen. The predicted three-dimensional model of the homeodomain of CEH-37, which has a typical helix-loop-helix structure, was similar to that of the Myb domain of known telomere-binding proteins, which is also a helix-loop-helix protein, despite little amino acid sequence similarity. We demonstrated the specific binding of CEH-37 to the nematode telomere sequences in vitro by competition assays. We determined that CEH-37 binding required at least 1.5 repeats of TTAGGC and that the core sequence for binding was GGCTTA. We found that CEH-37 had an ability to bend telomere sequence-containing DNA, which is the case for other known telomere-binding proteins such as TRF1 and RAP1, indicating that CEH-37 may be involved in establishing or maintaining a secondary structure of the telomeres in vivo. We also demonstrated that CEH-37 was primarily co-localized to the chromosome ends in vivo, indicating that CEH-37 may play roles in telomere functions. Consistent with this, a ceh-37 mutation resulting in a truncated protein caused a weak high incidence of male phenotype, which may have been caused by chromosome instability. The identification of CEH-37 as a telomere-binding protein may represent an evolutionary conservation of telomere-binding proteins in terms of tertiary protein structure rather than primary amino acid sequence.