E2a-Pbx1 chimeric oncoproteins result from fusion of the E2A and PBX1 genes at the sites of t(1;19) chromosomal translocations in a subset acute lymphoblastic leukemias. Experimentally, E2a-Pbx1 transforms a variety of cell types, including fibroblasts, myeloid progenitors, and lymphoblasts. Structure-function studies have shown that contributions from both E2a and Pbx1 are necessary for oncogenesis, but the Pbx1 homeodomain is dispensable and the required portion of Pbx1 has not been delineated. In this study, we used deletional and site-directed mutagenesis to identify portions of Pbx1 necessary for oncogenic and transcriptional activities of E2a-Pbx1. These studies defined a motif (named the Hox cooperativity motif [HCM]) carboxy terminal to the Pbx homeodomain that is required for cooperative DNA binding, cellular transcriptional activity, and the oncogenic potential of E2a-Pbx1. The HCM is highly conserved throughout the Pbx/exd subfamily of divergent homeodomain proteins and functions in DNA-binding assays as a potential contact site for Hox dimerization. E2a-Pbx1 proteins with interstitial deletion or single-point mutations in the HCM could neither activate transcription in cellular assays nor transform NIH 3T3 cells. An E2a-Pbx1 mutant containing 50 amino acids of Pbx1b spanning the HCM but lacking the homeodomain was capable of inducing fibroblast transformation. Thus, the HCM is a necessary and sufficient contribution of Pbx1 for oncogenesis induced by E2a-Pbx1 and accounts for its homeodomain-independent transforming properties. Since subtle alterations of the Pbx HCM result in complete abrogation of transforming activity whereas the homeodomain is entirely dispensable, we conclude that interactions mediated by the HCM are more important for transformation by E2a-Pbx1 than interactions with cognate Pbx DNA sites.