Brassinosteroids (BRs) signal through a plasma membrane-localized receptor kinase to regulate plant growth and development. We showed previously that a novel protein, BES1, accumulates in the nucleus in response to BRs, where it plays a role in BR-regulated gene expression; however, the mechanism by which BES1 regulates gene expression is unknown. In this study, we dissect BES1 subdomains and establish that BES1 is a transcription factor that binds to and activates BR target gene promoters both in vitro and in vivo. BES1 interacts with a basic helix-loop-helix protein, BIM1, to synergistically bind to E box (CANNTG) sequences present in many BR-induced promoters. Loss-of-function and gain-of-function mutants of BIM1 and its close family members display BR response phenotypes. Thus, BES1 defines a new class of plant-specific transcription factors that cooperate with transcription factors such as BIM1 to regulate BR-induced genes.