The transcription factors, thyroid transcription factor 1 (TTF-1) and Pax 8, play a pivotal role in the transcriptional regulation of the thyroid differentiation marker genes and in the differentiation of the thyroid follicular cells. They have a very restricted tissue distribution, and the thyrocyte is the only cell type with the simultaneous expression of these factors. Here we show that TTF-1 and Pax 8 cooperatively activate their target genes and that their synergistic activity requires the cross-talk between enhancer and gene promoter. We have characterized the cis and trans requirements of the TTF1/Pax 8 synergistic activity on the thyroperoxidase gene. We show that their synergy is also important for thyroglobulin gene transcription.