In a previous study we showed that the murine homeodomain protein Msx-1 is a potent transcriptional repressor and that this activity is independent of its DNA binding function. The implication of these findings is that repression by Msx-1 is mediated through its association with certain protein factors rather than through its interaction with DNA recognition sites, which prompted investigation of the relevant protein factors. Here we show that Msx-1 interacts directly with the TATA binding protein (TBP) but not with several other general transcription factors. This interaction is mediated by the Msx-1 homeodomain, specifically through residues in the N-terminal arm. These same N-terminal arm residues are required for repression by Msx-1, suggesting a functional relationship between TBP association and transcriptional repression. This is further supported by the observation that addition of excess TBP blocks the repressor action of Msx-1 in in vitro transcription assays. Finally, DNA binding activity is separable from both TBP interaction and repression, which further shows that these other activities of the Msx-1 homeodomain are distinct. Therefore, these findings define a role for the Msx-1 homeodomain, particularly the N-terminal arm residues in protein-protein interaction and transcriptional repression, and implicate a more complex role overall for homeodomains in transcriptional regulation.