Ind-Gsh-type homeodomain proteins are critical to patterning of intermediate domains in the developing CNS; yet, the molecular basis for the activities of these homeodomain proteins is not well understood. Here we identify domains within the Ind protein that are responsible for transcriptional repression, as well as those required for its interaction with the co-repressor, Groucho. To do this, we utilized a combination of chimeric transient transfection assays, co-immunoprecipitation and in vivo expression assays. We show that Ind's candidate Eh1 domain is essential to the embryonic repression activity of this protein, and that Groucho interacts with Ind via this domain. However, when activity is assayed in transient transfection assays using Ind-Gal4 DNA binding domain chimeras to determine domain activity, the repression activity of the Eh1 domain is minimal. This result is similar to previous results on the transcription factors, Vnd and Engrailed. Furthermore, the Eh1 domain is necessary, but not sufficient, for binding to Groucho; the C terminus of Ind, including the homeodomain also affects the interaction with this co-repressor in co-immunoprecipitations. Finally, we show that aspects of the cross-repressive activities of Ind/Gsh2-Ey/Pax6 are evolutionarily conserved. Taken together, these results point to conserved mechanisms used by Gsh/Ind-type homeodomain protein in regulating the expression of target genes.