LFB1/HNF1 regulates the hepatocyte-specific transcription of several genes, binding as a dimer to cis-acting elements that match the inverted palindrome GTTAATNATTAAC. The DNA binding domain of LFB1/HNF1 is characterized by a unique tripartite structure that includes an unusually long homeodomain (domain C), a region related to the POU-specific A-box (domain B) and a short N-terminal dimerization domain (domain A). We report that a recombinant peptide corresponding to the isolated homeodomain of LFB1/HNF1 binds as a monomer to a half-palindrome binding site, but shows diminished sequence specificity. Domain B, in addition to the homeodomain, is required and sufficient for proper recognition of LFB1/HNF1-responsive sites. A protein consisting of only these latter two domains is a monomer in solution, but forms dimers upon DNA binding. The protein-protein contacts established within the bound dimer restrain the orientation of the two homeodomains with respect to one another, thus contributing in a critical fashion to the recognition of the dyad symmetry-related LFB1/HNF1 sites. The DNA-independent dimerization domain (domain A) is required to increase the affinity of DNA binding, but does not influence the dimer geometry.