The Drosophila gene fork head (fkh) encodes a nuclear protein which shares sequence similarity with the rat hepatocyte-enriched transcription factor family HNF3 alpha-gamma. The sequence similarity is restricted to the region that has been defined as the DNA-binding domain of these proteins, termed the fork head domain. In this study, we investigate the structural properties of the fork head domain of the prototype of this protein family encoded by fkh and its interaction with DNA. The core sequence required for DNA binding of the fork head domain consists of 114 amino acids and represents a stable and highly compact monomer of globular structure with an alpha-helix content of 37%. The fork head domain binds specifically to the DNA target sequence of HNF3 alpha-gamma and to an enhancer element that is derived from a regulatory sequence of an in vivo Drosophila target gene. The specific interaction between the DNA-binding domain of the fkh-encoded protein and its target DNA is mediated by two contact regions which are separated from each other by one turn of the DNA. Our data are consistent with a structural model which derived rom X-ray diffraction analysis of the DNA-binding domain of HNF3 gamma. Differences concerning the DNA contact sites between the DNA-binding domain of the fkh-encoded protein and the HNF3 protein family are discussed.