Homeobox genes specify cell fate and positional identity in embryos throughout the animal kingdom(1). Paradoxically, although each has a specific function in vivo, the in vitro DNA-binding specificities of homeodomain proteins are overlapping and relatively weak. A current model is that homeodomain proteins interact with cofactors that increase specificity in vivo(2,3). Here we use a native binding site for the homeodomain protein Fushi tarazu (Ftz) to isolate Ftz-F1, a protein of the nuclear hormone-receptor superfamily and a new Ftz cofactor. Ftz and Ftz-F1 are present in a complex in Drosophila embryos. Ftz-F1 facilitates the binding of Ftz to DNA, allowing interactions with weak-affinity sites at concentrations of Ftz that alone bind only high-affinity sites. Embryos lacking Ftz-F1 display ftz-like pair-rule cuticular defects. This phenotype is a result of abnormal ftz function because it is expressed but fails to activate downstream target genes. Cooperative interaction between homeodomain proteins and cofactors of different classes may serve as a general mechanism to increase HOX protein specificity and to broaden the range of target sites they regulate.