The 86-kDa IE2 nuclear phosphoprotein encoded by the human cytomegalovirus (HCMV) major immediate-early (MIE) gene behaves as both a non-specific transactivator of viral and cellular gene expression and as a specific DNA-binding protein targeted to the cis-repression sequence (CRS) at the cap site of its own promoter/enhancer region. Although the IE2 protein produced in bacteria has been shown to bind to the 14-bp palindromic CRS motif and IE2 synthesized in vitro forms stable dimers in solution through the conserved C-terminus of the protein, there is no direct evidence as yet that the intracellular mammalian forms of IE2 do so. Here, we show that the intact HCMV IE2 protein both binds to CRS DNA and dimerizes in yeast cells. In a one-hybrid assay system, a GAL4/IE2 fusion protein expressed in yeast cells activated target HIS3 expression only when CRS sites were located upstream of the GAL1 minimal promoter, but failed to do so on mutant CRS sites, demonstrating a requirement for sequence-specific DNA-binding by IE2. Examination of a series of deletion and triple amino acid point mutations in the C-terminal half of IE2 mapped the domains required for DNA-binding in yeast to the entire region between codons 313 and 579, whereas in the previous in-vitro study with truncated bacterial GST fusion proteins, it was mapped to between codons 346 and 579. Transient co-transfection assays with deleted IE2 effector genes in Vero cells showed that the extra segment of IE2 between codons 313 and 346 is also required for both autoregulation and transactivation activity in mammalian cells. In a two-hybrid assay to study IE2 self-interations, we generated both GAL4 DNA-binding (DB) and activation domain (A)/IE2 fusion proteins and showed that IE2 could also dimerize or oligomerize through the C-terminus of the protein in yeast cells. Domains required for this interaction were all mapped to within the region between codons 388 and 542, which is coincident with the domain mapped previously for dimerization by co-translation and immunoprecipitation in vitro. Comparison of the domains of the IE2 protein required for CRS binding and dimerization in yeast suggests that these activities correlate precisely with requirements for the negative autoregulation function of the IE2 protein in mammalian cells.