The otd/Otx gene family encodes paired-like homeodomain proteins that are involved in the regulation of anterior head structure and sensory organ development. Using the yeast one-hybrid screen with a bait containing the Ret 4 site from the bovine rhodopsin promoter, we have cloned a new member of the family, Crx (Cone rod homeobox). Crx encodes a 299 amino acid residue protein with a paired-like homeodomain near its N terminus. In the adult, it is expressed predominantly in photoreceptors and pinealocytes. In the developing mouse retina, it is expressed by embryonic day 12.5 (E12.5). Recombinant Crx binds in vitro not only to the Ret 4 site but also to the Ret 1 and BAT-1 sites. In transient transfection studies, Crx transactivates rhodopsin promoter-reporter constructs. Its activity is synergistic with that of Nrl. Crx also binds to and transactivates the genes for several other photoreceptor cell-specific proteins (interphotoreceptor retinoid-binding protein, beta-phosphodiesterase, and arrestin). Human Crx maps to chromosome 19q13.3, the site of a cone rod dystrophy (CORDII). These studies implicate Crx as a potentially important regulator of photoreceptor cell development and gene expression and also identify it as a candidate gene for CORDII and other retinal diseases.