Homeodomains are a class of DNA-binding protein domains which play an important role in genetic regulation in eukaryotes. We have characterized the thermodynamics of folding and sequence-specific association with DNA of the MAT alpha 2 homeodomain of yeast. Using differential scanning and isothermal titration calorimetry, we measured the enthalpy, heat capacity, and Gibbs free energy changes of these processes. The protein-DNA interaction is enthalpically driven at physiological temperatures. DSC data on the process of melting the protein-DNA complex at different salt concentrations were dissected into its endothermic components, yielding the enthalpy change and dissociation constant of binding. A comparison of the circular dichroism spectra of the free and DNA-bound protein species revealed the formation of additional alpha-helical structure upon binding to DNA. We propose that the latter half of helix 3, the recognition helix, is substantially unfolded in the free protein under the conditions used, as has been observed with other homeodomains [Tsao, D. H. H., et al. (1994) Biochemistry 33, 15053-15060: Cox, M., et al. (1995) J. Biomol. NMR 5, 23-32]. Formation of protein structure is induced by DNA binding, and the energies measured for association therefore include a component due to folding.