The initiation of transcription is regulated by transcription factors (TFs) binding to DNA response elements (REs). How do TFs recognize specific binding sites among the many similar ones available in the genome? Recent research has illustrated that even a single nucleotide substitution can alter the selective binding of TFs to coregulators, that prior binding events can lead to selective DNA binding, and that selectivity is influenced by the availability of binding sites in the genome. Here, we combine structural insights with recent genomics screens to address the problem of TF-DNA interaction specificity. The emerging picture of selective binding site sequence recognition and TF activation involves three major factors: the cellular network, protein and DNA as dynamic conformational ensembles and the tight packing of multiple TFs and coregulators on stretches of regulatory DNA. The classification of TF recognition mechanisms based on these factors impacts our understanding of how transcription initiation is regulated.