The early growth response 2 gene (EGR2) is a Cys2His2 zinc finger transcription factor which is thought to play a role in the regulation of peripheral nervous system myelination. This idea is based partly on the phenotype of homozygous Krox20 (Egr2) knockout mice, which display hypomyelination of the PNS and a block of Schwann cells at an early stage of differentiation. Mutations in the human EGR2 gene have recently been associated with the inherited peripheral neuropathies Charcot-Marie-Tooth type 1, Dejerine-Sottas syndrome and congenital hypomyelinating neuropathy. Three of the four EGR2 mutations are dominant and occur within the zinc finger DNA-binding domain. The fourth mutation is recessive and affects the inhibitory domain (R1) that binds the NAB transcriptional co-repressors. A combination of DNA-binding assays and transcriptional analysis was used to determine the functional consequences of these mutations. The zinc finger mutations affect DNA binding and the amount of residual binding directly correlates with disease severity. The R1 domain mutation prevents interaction of EGR2 with the NAB co-repressors and thereby increases transcriptional activity. These data provide insight into the possible disease mechanisms underlying EGR2 mutations and the reason for varying severity and differences in inheritance patterns.