The mating-type locus (MAT) encodes several DNA-binding proteins, which determine the three cell types of Saccharomyces cerevisiae: the a and alpha haploid cell types, and the a/alpha diploid cell type. One of the products of MAT, alpha 2, functions in two cell types. In alpha cells, alpha 2 represses the a-specific genes by binding to the operator as a dimer. In a/alpha diploid cells, alpha 2 acts with a1, a product of the other MAT allele, to repress a different set of genes, the haploid-specific genes. Until now, the nature of the interaction between a1 and alpha 2 was not known, although it had been suggested that alpha 2 may form a heterodimer with a1. I show, by using proteins synthesized in vitro, that a1 and alpha 2 bind the operator of a haploid-specific gene as a heterodimer. The ability of alpha 2 to form both homodimers and heterodimers with a1, each with a different DNA-binding specificity, explains the dual regulatory functions of alpha 2. This is the first example of regulation by heterodimerization among homeobox-containing proteins, a class that includes proteins responsible for the specification of segment identity in Drosophila, mammals and other eukaryotes.