The octamer transcription factors Oct1 and Oct2 are involved in the transcriptional regulation of both lymphoid-specific and ubiquitously expressed genes. Their activity depends critically on their interaction with distinct cellular cofactors. Therefore, we have isolated cDNAs encoding proteins that physically interact with Oct2. Here we describe the analysis of one such clone, representing the murine homologue of high mobility group (HMG) protein 2. We have mapped the interaction domains for both proteins and have shown that HMG2 and Oct2 interact via their HMG domains and POU homeodomains, respectively. This interaction is not restricted to Oct2, as other members of the octamer transcription factor family like Oct1 and Oct6 also interact with HMG2. The interaction with HMG2 results in a marked increase in the sequence-specific DNA binding activity of the Oct proteins. Interestingly, the HMG2 protein is not present in the protein-DNA complex detected by an electrophoretic mobility shift assay. The Oct and HMG2 proteins also interact in vivo. A chimeric protein, in which the strong transactivation domain of VP16 was fused directly to the HMG domains of HMG2, stimulated the activity of an octamer-dependent reporter construct upon cotransfection. Furthermore, the expression of antisense RNA for HMG2 specifically reduces octamer-dependent transcription. These results suggest that one of the functions of HMG2 is to support the octamer transcription factors in their role as transcriptional activators.