Pax genes control certain aspects of development, as mutations result in (semi)dominant defects apparent during embryogenesis. Pax-3 has been associated with the mouse mutant splotch (Sp) and the human Waardenburg syndrome type 1 (WS1). We have examined the molecular basis of splotch and WS1 by studying the effect of mutations on DNA binding, using a defined target sequence. Pax-3 contains two different types of functional DNA-binding domains, a paired domain and a homeodomain. Mutational analysis of Pax-3 reveals different modes of DNA binding depending on the presence of these domains. A segment of Pax-3 located between the two DNA-binding domains, including a conserved octapeptide, participates in protein homodimerization. Pax-3 mutations found in splotch alleles and WS1 individuals change DNA binding and, in the case of a protein product of the Sp allele, dimerization. These findings were taken as a basis to define the molecular nature of the mutants.