Barx1 and Barx2 are homeodomain proteins originally identified using regulatory elements of genes encoding certain cell adhesion molecules (CAMs). In the present study, we characterize regions of Barx2 that bind to regulatory elements of genes encoding three CAMs, L1, neuron-glia CAM (Ng- CAM), and neural CAM (N-CAM), and identify domains of Barx2 that regulate N- CAM transcription. The homeodomain of Barx2 was sufficient for binding to homeodomain binding sites (HBS) from all three CAM genes. The presence of a 17-amino acid Barx basic region resulted in a 2-fold decrease in binding to HBS sequences from the Ng-CAM and L1 genes, whereas it led to a 6.5-fold increase in binding to the HBS from the N-CAM promoter. Thus, the Barx basic region influences the strength and specificity of Barx2 binding to DNA. In co-transfection experiments, Barx2 repressed N-CAM promoter activity. A 24- residue N-terminal region of Barx2 was essential for repression. When this region was absent, Barx2 activated the N-CAM promoter. A 63-residue C- terminal domain was required for this activation. In GST pull-down experiments, Barx2 bound to proteins of the CREB family, CREB1 and ATF2. Overall, these findings provide a framework for understanding developmental and physiological contexts that influence repressor or activator functions of Barx2.