Osteocalcin (OC) is a calcium binding protein expressed in mature osteoblasts undergoing mineralization. The OC gene has been identified as a target for transcriptional suppression by Msx2, a homeodomain transcription factor that controls ossification in calvarial bone of the developing skull. We have initiated systematic structure-function analyses of Msx2, using OC promoter suppression (luciferase reporter) in MC3T3-E1 calvarial osteoblasts as an assay. Msx2 variants were epitope ('FLAG')-tagged for monitoring Msx2 protein expression by Western blot analysis. Functional analyses of N- and C- terminally truncated molecules identify Msx2 residues 97-208 as the core suppressor domain. Internal deletion analyses indicate that suppressor function is dependent upon structural features encoded by residues 132-148- upstream of the homeodomain and overlapping the homeodomain N-terminal extension-but not upon residues in the three homeodomain helices. Mutations that enhance DNA binding activity do not proportionally enhance Msx2 suppressor function; moreover, a Msx2 point mutant Msx2(T147A) that completely lacks DNA binding activity is indistinguishable from wild-type Msx2 in its ability to suppress the OC promoter, demonstrating that direct interaction with DNA is not required for Msx2 suppressor function. This suggests that Msx2 suppresses transcription via protein-protein interactions with components of the basal transcriptional machinery, either alone or in concert with co-regulators. Using interaction 'Far Western' blotting assays, we systematically tested for protein-protein interactions between Msx2 and components of the basal transcriptional machinery known to mediate transcriptional activation (TBP, TFIIB, and TFIIF). Msx2 binds both components of TFIIF (RAP74, RAP30), but not TFIIB or TBP. Msx2(55-208) encompasses core suppressor domain residues and binds TFIIF; in this context, deletion of the seventeen amino acid residues 132-148 that are required for core suppressor function abrogates interactions with TFIIF components. Co- expression of RAP74 in MC3T3-E1 cells partially reverses (>50%) suppression of OC promoter activity by Msx2, while co-expression of TFIIB or RAP30 has no effect. Thus the core suppressor domain of Msx2 participates in functionally important interactions with RAP74 that regulate OC promoter activity in calvarial osteoblasts.