Tumor-specific activation of the TAL1 gene is the most common genetic alteration seen in patients with T-cell acute lymphoblastic leukemia. The TAL1 gene products contain the basic helix-loop-helix (bHLH) domain, a protein dimerization and DNA-binding motif common to several known transcription factors. A binding-site selection procedure has now been used to evaluate the DNA recognition properties of TAL1. These studies demonstrate that TAL1 polypeptides do not have intrinsic DNA-binding activity, presumably because of their inability to form bHLH homodimers. However, TAL1 readily interacts with any of the known class A bHLH proteins (E12, E47, E2-2, and HEB) to form heterodimers that bind DNA in a sequence-specific manner. The TAL1 heterodimers preferentially recognize a subset of E-box elements (CANNTG) that can be represented by the consensus sequence AACAGATGGT. This consensus is composed of half-sites for recognition by the participating class A bHLH polypeptide (AACAG) and the TAL1 polypeptide (ATGGT). TAL1 heterodimers with DNA-binding activity are readily detected in nuclear extracts of Jurkat, a leukemic cell line derived from a patient with T-cell acute lymphoblastic leukemia. Hence, TAL1 is likely to bind and regulate the transcription of a unique subset of subordinate target genes, some of which may mediate the malignant function of TAL1 during T-cell leukemogenesis.