NUC-1, a positive regulatory protein of Neurospora crassa, controls the expression of several unlinked target genes involved in phosphorus acquisition. The carboxy-terminal end of the NUC-1 protein has sequence similarity to the helix-loop-helix family of transcription factors. Bacterially expressed and in vitro-synthesized proteins, which consist of the carboxy-terminal portion of NUC-1, bind specifically to upstream sequences of two of its target genes, pho2+ and pho-4+. These upstream sequences contain the core sequence, CACGTG, a target for many helix-loop-helix proteins. A large loop region (47 amino acids) separates the helix I and helix II domains. Mutations and deletion within the loop region did not interfere with the in vitro or in vivo functions of the protein. Immediately carboxy-proximal to the helix II domain, the NUC-1 protein contains an atypical zipper domain which is essential for function. This domain consists of a heptad repeat of alanine and methionine rather than leucine residues. Analysis of mutant NUC-1 proteins suggests that the helix II and the zipper domains are essential for the protein dimerization, whereas the basic and the helix I domains are involved in DNA binding. The helix I domain, even though likely to participate in dimer formation while NUC-1 is bound to DNA, is not essential for in vitro dimerization.