A common DNA binding and dimerization domain containing an apparent "helix-loop-helix" (HLH) structure was recognized recently in a number of regulatory proteins, including the E47 and E12 proteins that bind to the kappa E2 motif in immunoglobulin kappa gene enhancer. The effect of site-directed mutagenesis on E47 protein multimerization and DNA binding was examined. Mutations in either putative helix domain disrupted protein dimerization and DNA binding. No DNA binding was observed when mutations were introduced in the basic region, but these mutants were able to dimerize. These basic region mutants were not able to bind to DNA as heterodimers with the wild-type E47 proteins, demonstrating that two functional basic regions are required for binding to DNA. Therefore the basic region mutants are "transdominant."