Genes of the Polycomb group (PcG) of Drosophila encode proteins necessary for the maintenance of transcriptional repression of homeotic genes. PcG proteins are thought to act by binding as multiprotein complexes to DNA through Polycomb group response elements (PREs); however, specific DNA binding has not been demonstrated for any of the PcG proteins. We have identified a sequence-specific DNA binding protein that interacts with a PRE from the Drosophila engrailed gene. This protein (PHO) is a homolog of the ubiquitous mammalian transcription factor Yin Yang-1 and is encoded by pleiohomeotic, a known member of the PcG. We propose that PHO acts to anchor PcG protein complexes to DNA.