The murine paired box containing gene Pax-2 has been proposed to be involved in kidney and central nervous system (CNS) development. In this report, we show that expression cloning of Pax-2 cDNA allowed in vitro identification of specifically bound DNA sequences. When fused to the thymidine kinase (TK) promoter in front of reporter genes, these target sequences were able to mediate trans-activation by Pax-2 protein, thus demonstrating their in vivo function. Expression studies from adult mouse tissues revealed high levels of Pax-2 transcripts in male and female genital tracts, suggesting a second phase of Pax-2 activity. Sequence-specific DNA binding and subsequent modulation of promoter activities may constitute the molecular mechanism of Pax-2 action in specific adult tissues and during development.