The murine paired box gene Pax-1 has been associated with the mouse developmental mutant undulated (un), which exhibits malformations in the vertebral column. In un mice, a point mutation leading to a Gly-Ser exchange in a conserved part of the paired domain of Pax-1 is present. Here we show that Pax-1 encodes a DNA-binding protein with transcriptional activating properties. The DNA-binding specificity of the Pax-1 protein has been extensively analyzed in gel shift assays, and in conjunction with binding interference experiments, a DNA-binding core motif was defined. Comparison of the DNA-binding properties of wild-type and un Pax-1 proteins demonstrates that the Gly-Ser replacement at position 15 within the paired domain dramatically decreases the DNA-binding affinity of the un Pax-1 protein and alters its DNA-binding specificity. These results decipher the molecular basis of the un mutation.