Max is a common dimerization partner for a family of transcription factors (Myc, Mad [or Mxi]), and Mnt [or Rox] proteins) that regulate cell growth, proliferation, and apoptosis. We recently characterized a novel Max-like protein, Mlx, which interacts with Mad1 and Mad4. Here we describe the cloning and functional characterization of a new family of basic helix-loop-helix-leucine zipper heterodimeric partners for Mlx termed the Mondo family. MondoA forms homodimers weakly and does not interact with Max or members of the Myc or Mad families. MondoA and Mlx associate in vivo, and surprisingly, they are localized primarily to the cytoplasm of cultured mammalian cells. Treatment of cells with the nuclear export inhibitor leptomycin B results in the nuclear accumulation of MondoA and Mlx, demonstrating that they shuttle between the cytoplasmic and nuclear compartments rather than having exclusively cytoplasmic localization. MondoA preferentially forms heterodimers with Mlx, and this heterocomplex can bind to, and activate transcription from, CACGTG E-boxes when targeted to the nucleus via a heterologous nuclear localization signal. The amino termini of the Mondo proteins are highly conserved among family members and contain separable and autonomous cytoplasmic localization and transcription activation domains. Therefore, Mlx can mediate transcriptional repression in conjunction with the Mad family and can mediate transcriptional activation via the Mondo family. We propose that Mlx, like Max, functions as the center of a transcription factor network.