We have previously shown that Nkx3.2, a member of the NK class of homeoproteins, functions as a transcriptional repressor to promote somitic chondrogenesis. However, it has not been addressed whether Nkx3.2 can bind to DNA in a sequence-specific manner and whether DNA binding by Nkx3.2 is required for its biological activity. In this work, we employed a DNA binding site selection assay, which identified TAAGTG as a high affinity Nkx3.2 binding sequence. Sequence-specific binding of Nkx3.2 to the TAAGTG motif in vitro was confirmed by electrophoretic mobility shift assays, and mutagenesis of this sequence revealed that HRAGTG (where H represents A, C, or T, and R represents A or G) comprises the consensus DNA binding site for Nkx3.2. Consistent with these findings, the expression of a reporter gene containing reiterated Nkx3.2 binding sites was repressed in vivo by Nkx3.2 co-expression. In addition, we have generated a DNA nonbinding point mutant of Nkx3.2 (Nkx3.2-N200Q), which contains an asparagine to glutamine missense mutation in the homeodomain. Interestingly, despite being defective in DNA binding, Nkx3.2-N200Q still retains its intrinsic transcriptional repressor function. Finally, we demonstrate that unlike wild-type Nkx3.2, Nkx3.2-N200Q is unable to activate the chondrocyte differentiation program in somitic mesoderm, indicating that DNA binding by Nkx3.2 is critical for this factor to induce somitic chondrogenesis.