The E2 open reading frame (ORF) of bovine papillomavirus type 1 (BPV-1) encodes positive- and negative-acting factors that regulate viral gene expression. The full-length ORF encodes a transactivator, and two transcriptional repressors are expressed from the 3' half of the ORF. Previous analysis has shown that a conserved C-terminal region of 101 amino acids, which is shared by E2 transactivator and repressor proteins, contains the specific DNA binding activity. Further analysis of the E2 transactivator shows that a conserved N-terminal domain of approximately 220 amino acids is crucial for the transcriptional activation function, whereas the variable internal region is not required. The E2 proteins bind to a sequence, ACCGN4CGGT, several copies of which are sufficient to constitute an E2-dependent enhancer. By using a gel retardation assay and proteins derived by in vitro transcription and translation, we were able to show that the E2 polypeptides bind as dimers to a single DNA binding site. The dimeric E2 proteins are stable in the absence of DNA and dimerization is mediated through the DNA binding domain. This may reveal an additional mechanism of repression that could potentially result from the formation of inactive heterodimers between transactivator and repressor species.