The winged-helix transcription factor PHA-4 specifies organ identity during pharynx and rectal development. Embryos lacking pha-4 activity produce no pharyngeal or rectal cells while embryos expressing ectopic pha-4 generate extra pharyngeal and rectal cells at the expense of other cell types. PHA-4 is also expressed in the gonad, but its function in this organ is unknown. Homologs of pha-4 are found in most if not all metazoans, where they also regulate gut development. Proteins belonging to this family are predicted to be transcription factors, with a well-characterized DNA binding domain. However, little is known about how these proteins regulate transcription to produce such profound effects on development. To begin to address this issue, we have initiated an analysis of PHA-4 protein and PHA-4 cofactors. Our characterization of five pha-4 alleles demonstrates that the amino terminus is critical for PHA-4 function. Surprisingly, the carboxyl terminus, which is conserved with vertebrate HNF-3 proteins and Ce-DISTALLESS, is dispensable. Since transcription factors often function by recruiting other proteins to target genes, we used a yeast 2-hybrid screen to identify proteins that bind the PHA-4 amino terminus. We isolated six potential cofactors from a screen of >1x106 clones and have chosen one of these proteins for further study (the chw genes for Components that Heterodimerize with a Winged helix protein). We have confirmed that CHW-1 can bind PHA-4 in vitro, suggesting these proteins contact each other directly. PHA-4 and CHW-1 may function together to regulate expression of a subset of PHA-4 target genes. CHW-1 is a novel, glutamine-rich protein that is expressed in the intestine, rectum and pm6 pharyngeal muscles, as is PHA-4. In addition, CHW-1::GFP is expressed in body wall muscles where PHA-4 is not found. We have used RNAi to show that loss of chw-1 activity affects cells that normally express PHA-4. In many chw-1(RNAi) animals, the pharyngeal grinder is deformed, larvae appear starved, and gonad migration is defective. Interestingly, these phenotypes are strongly enhanced when PHA-4 activity is compromised. We suggest that PHA-4 may bind distinct CHW factors to regulate different target genes in the pharynx, rectum or gonad.