Homeodomain-leucine zipper (HDZip) proteins constitute a large family of transcription factors apparently unique to plants. In this report we characterize the DNA-binding and dimerization preferences in vitro of class I HDZip proteins. Using gel-exclusion chromatography and in vitro protein binding assays we demonstrate that the HDZip class I protein ATHB5 forms a homodimeric complex in solution. Consistent with this finding we have demonstrated the sequence-specific interaction of ATHB5 with a 9 bp pseudopalindromic DNA sequence, CAATNATTG, composed of two half-sites overlapping at a central position, by use of a PCR-assisted binding-site selection assay and competitive EMSA experiments. A majority of other known members of HDZip class I interacted with similar DNA sequences, but differed in their preference for A/T versus G/C in the central position of the binding site. Selective heterodimerization in vitro was demonstrated between ATHB5 and different class I HDZip proteins. Heterodimer formation between class I HDZip proteins is of potential functional significance for the integration of information from different signalling pathways in the control of plant development.