The ets family of transcription factors is characterized by a conserved region that harbors the DNA-binding activity. We performed extensive deletion and mutational analyses, as well as DNA-peptide interaction studies necessary to identify the determinants of the DNA-binding activity of the ETS1 oncoprotein. We found that amino acids beyond the 85 amino acid conserved region are required in order to afford maximum DNA-binding activity in a heterologous system. Mutation throughout the binding domain can have a detrimental effect on binding activity, indicating that proper folding of the entire domain is necessary for DNA binding. A peptide, as small as 37 residues (K37N), derived from the basic region of the ETS1 binding domain, is sufficient to exhibit sequence-specific DNA recognition. Total randomization of Lysine 379, Lysine 381 and Arginine 391 within this region fails to provide functional substitutions, indicating that these specific amino acids within the basic region are required for binding. Transactivation activity of the ETS1 proteins bearing mutations was consistent with their DNA-binding activity, indicating that the primary (if not only) function of this domain is to provide sequence-specific DNA recognition activity. Our mutational analysis, as well as modeling predictions, lead us to propose a helix-turn-helix structure for the basic region of the ETS1 binding domain that is able to interact directly with DNA. We also propose that the hydrophobic alpha-helical region, surrounding tryptophan 338, is fundamental for proper protein folding and functioning of the ets binding domain.