The SOXE transcription factors SOX8, SOX9 and SOX10 are master regulators of mammalian development directing sex determination, gliogenesis, pancreas specification and neural crest development. We identified a set of palindromic SOX binding sites specifically enriched in regulatory regions of melanoma cells. SOXE proteins homodimerize on these sequences with high cooperativity. In contrast to other transcription factor dimers, which are typically rigidly spaced, SOXE group proteins can bind cooperatively at a wide range of dimer spacings. Using truncated forms of SOXE proteins, we show that a single dimerization (DIM) domain, that precedes the DNA binding high mobility group (HMG) domain, is sufficient for dimer formation, suggesting that DIM : HMG rather than DIM:DIM interactions mediate the dimerization. All SOXE members can also heterodimerize in this fashion, whereas SOXE heterodimers with SOX2, SOX4, SOX6 and SOX18 are not supported. We propose a structural model where SOXE-specific intramolecular DIM:HMG interactions are allosterically communicated to the HMG of juxtaposed molecules. Collectively, SOXE factors evolved a unique mode to combinatorially regulate their target genes that relies on a multifaceted interplay between the HMG and DIM domains. This property potentially extends further the diversity of target genes and cell-specific functions that are regulated by SOXE proteins.