Pax proteins are transcriptional regulators that play important roles during embryogenesis. These proteins recognize specific DNA sequences via a conserved element: the paired domain (Prd domain). The low level of organized secondary structure, in the free state, is a general feature of Prd domains; however, these proteins undergo a dramatic gain in alpha-helical content upon interaction with DNA ('induced fit'). Pax8 is expressed in the developing thyroid, kidney and several areas of the central nervous system. In humans, mutations of the Pax8 gene, which are mapped to the coding region of the Prd domain, give rise to congenital hypothyroidism. Here, we have investigated the molecular defects caused by a mutation in which leucine at position 62 is substituted for an arginine. Leu62 is conserved among Prd domains, and contributes towards the packing together of helices 1 and 3. The binding affinity of the Leu62Arg mutant for a specific DNA sequence (the C sequence of thyroglobulin promoter) is decreased 60-fold with respect to the wild-type Pax8 Prd domain. However, the affinities with which the wild-type and the mutant proteins bind to a non-specific DNA sequence are very similar. CD spectra demonstrate that, in the absence of DNA, both wild-type Pax8 and the Leu62Arg mutant possess a low alpha-helical content; however, in the Leu62Arg mutant, the gain in alpha-helical content upon interaction with DNA is greatly reduced with respect to the wild-type protein. Thus the molecular defect of the Leu62Arg mutant causes a reduced capability for induced fit upon DNA interaction.