The Drosophila Dysfusion basic-helix-loop-helix-PAS (bHLH-PAS) protein controls the transcription of genes that mediate tracheal fusion. Dysfusion is highly related to the mammalian Nxf protein that has been implicated in nervous system gene regulation. Towards the goal of understanding how Dysfusion controls fusion cell gene expression, the biochemical properties of Dysfusion were investigated using protein interaction experiments, cell culture-based transcription assays, and in vivo transgenic analyses. Dysfusion dimerizes with the Tango bHLH-PAS protein, and together they act as a DNA-binding transcriptional activator. Dysfusion:Tango binds multiple NCGTG binding sites, with the following preference: TCGTG>GCGTG>ACGTG>CCGTG. This binding site promiscuity differs from the restricted binding site preferences of other bHLH-PAS:Tango heterodimers. However, it is identical to the binding site preferences of mammalian Nxf:Arnt, indicating that the specificity is evolutionarily conserved. Germline transformation experiments using a fragment of the CG13196 Dysfusion target gene allowed identification of a fusion cell enhancer. Experiments in which NCGTG sites were mutated individually and in combination revealed that TCGTG sites were required for fusion cell expression, but that the single ACGTG and GCGTG sites present were not. Finally, a reporter transgene containing 4 tandemly-arranged TCGTG elements has strong expression in tracheal fusion cells. Transgenic misexpression of dysfusion further revealed that Dysfusion has the ability to activate transcription in multiple cell types, although it does this most effectively in tracheal cells and can only function at mid-embryogenesis and later.