Krox-20 is a mouse zinc finger gene expressed in a segment-specific manner in the early central nervous system, which makes it a potential developmental control gene. In this report, we show that the Krox-20 protein binds in vitro to two specific DNA sites located upstream from the homeobox containing gene Hox-1.4. The nucleotide sequence recognized by Krox-20 is closely related to the Sp1 target sequence, which is consistent with the similarity existing between the zinc fingers of the two proteins. In co-transfection experiments in cultured cells, Krox-20 dramatically activates transcription from the herpes simplex virus thymidine kinase promoter when an oligomer of its binding site is present in cis close to the promoter. Analysis of mutated binding sites demonstrates that the level of activation by Krox-20 correlates with the affinity of the protein for the mutant sequence. These data indicate that Krox-20 constitutes a sequence-specific DNA-binding transcription factor. Parallel analysis of the expression of Krox-20 and Hox-1.4 in the neural tube by in situ hybridization revealed no overlap, arguing against direct interactions between these two genes. The possible involvement of Krox-20 in the regulation of the transcription of other homeobox genes is discussed in view of their respective patterns of expression.