The AML1 gene encodes DNA-binding proteins that contain the runt homology domain and is found at the breakpoints of t(8;21), t(3;21), and t(12;21) translocations associated with myelogenous leukemias. AML1 heterodimerizes with PEBP2beta/CBFbeta, resulting in the enhanced affinity with DNA. The runt homology domain is responsible for binding with DNA and heterodimerizing with PEBP2beta/CBFbeta. AML1 is suggested to perform a pivotal role in myeloid cell differentiation, whereas it can cause neoplastic transformation when overexpressed in fibroblasts. In this study, we demonstrated that the reducing reagent, dithiothreitol (DTT), markedly enhances the DNA binding of AML1 expressed in COS7 cells. Oxidation by diamide or modification by N-ethylmaleimide of the free sulfhydryl residues inhibited the interaction of AML1 with DNA. The diamide effect was reversible with excess of DTT, whereas DTT could not restore the DNA binding of AML1 treated with N-ethylmaleimide. Site-directed mutagenesis of the amino acid residue 72, a highly conserved cysteine in the runt homology domain of AML1, to serine almost completely abolished DNA binding without altering the interaction with PEBP2beta/CBFbeta. This substitution also impaired transactivation through the consensus DNA sequence and transformation of fibroblasts induced by AML1b. These data indicate an essential role of the conserved cysteine residue in DNA binding of AML1, and it is possible that the redox state of AML1 could contribute to the regulation of its function.