During the evolution of eukaryotes, a new structural motif arose by the fusion of genes encoding two different types of DNA-binding domain. The family of transcription factors which contain this domain, the POU proteins, have come to play essential roles not only in the development of highly specialised tissues, such as complex neuronal systems, but also in more general cellular housekeeping. Members of the POU family recognise defined DNA sequences, and a well-studied subset have specificity for a motif known as the octamer element which is found in the promoter region of a variety of genes. The structurally bipartite POU domain has intrinsic conformational flexibility and this feature appears to confer functional diversity to this class of transcription factors. The POU domain for which we have the most structural data is from Oct-1, which binds an eight base-pair target and variants of this octamer site. The two-part DNA-binding domain partially encircles the DNA, with the sub-domains able to assume a variety of conformations, dependent on the DNA element. Crystallographic and biochemical studies have shown that the binary complex provides distinct platforms for the recruitment of specific regulators to control transcription. The conformability of the POU domain in moulding to DNA elements and co-regulators provides a mechanism for combinatorial assembly as well as allosteric molecular recognition. We review here the structure and function of the diverse POU proteins and discuss the role of the proteins' plasticity in recognition and transcriptional regulation.