The Pbx/Exd family of homeodomain (HD) proteins contribute to the transcriptional and developmental roles of other Hox and Meis/Prep1/Hth HD proteins through heterodimer formation. E2a-Pbx1 is an oncogenic derrivative of Pbx1 produced by the t(1;19) translocation in pediatric pre-B cell acute lymphoblastic leukemia. E2a-Pbx1 heterodimerizes with Hox but not with Meis/Prep1 proteins, produces acute myeloid leukemia in mice, and blocks differentiation of cultured murine myeloid progenitors. Here, we characterize negative and positive regulatory sequences that flank the Pbx1 HD and determine their importance for myeloid immortalization by E2a-Pbx1. A 25 residue predicted alpha helix preceding the Pbx1 HD bound the HD and prevented both its binding to DNA and its ability to heterodimerize with Hox proteins. Addition of 39 residues N-terminal to this inhibitory helix exposed a Pbx dimerization interface that orchestrated cooperative DNA-binding of E2a-Pbx1 and all Pbx proteins as homodimers and heterdimers. Sequences inhibiting DNA-binding and mediating Pbx dimerization coincided with those reported to have nuclear export function. An additional 103 residues N-terminal to the Pbx dimerization interface restored heterodimerization with Hox and Meis1/Prep1 proteins. This negative switch domain - comprised of the inhibitory helix and N-terminal regions required for its partner-mediated derepression - was dispensable for myeloid immortalization by E2a-Pbx1. While stabilizing the heterodimer, the 310 helix C-terminal to the Pbx1 HD was also dispensable for the ability of E2a-Pbx1 to heterodimerize with Hox proteins and immortalize myeloblasts. Retention of myeloid immortalization by E2a-Pbx1 proteins lacking all Pbx1 sequences N- or C-terminal to the HD indicates that Hox proteins, or a yet undefined factor that binds the Pbx1 HD and derepresses DNA-binding by the HD, cooperate with E2a-Pbx1 in myeloid immortalization.