The discovery of conserved protein domains found in many Drosophila and mammalian developmental gene products suggests that fundamental developmental processes are conserved throughout evolution. Our understanding of development has been enhanced by the discovery of the widespread role of the homeodomain (HD). The action of HD-containing proteins as transcriptional regulators is mediated through a helix-turn-helix motif which confers sequence specific DNA binding. Unexpectedly, the well conserved structural homology between the HD and the prokaryotic helix-turn-helix proteins contrasts with their divergent types of physical interaction with DNA. A C-terminal extension of the HD recognition helix has assumed the role that the N-terminus of the prokaryotic helix plays for specification of DNA binding preference. However, the HD appears also capable of recognizing DNA in an alternative way and its specificity in vivo may be modified by regions outside the helix-turn-helix motif. We propose that this intrinsic complexity of the HD, as well as its frequent association with other DNA binding domains, explains the functional specificity achieved by genes encoding highly related HDs.