Twist is a transcription factor that is required for mesodermal cell fates in all animals studied to date. Mutations of this locus in humans have been identified as the cause of the craniofacial disorder Saethre-Chotzen syndrome. The Caenorhabditis elegans Twist homolog is required for the development of a subset of the mesoderm. A semidominant allele of the gene that codes for CeTwist, hlh-8, has defects that occur earlier in the mesodermal lineage than a previously studied null allele of the gene. The semidominant allele has a charge change (E29K) in the basic DNA-binding domain of CeTwist. Surprisingly, the mutant protein retains DNA-binding activity as both a homodimer and a heterodimer with its partner E/Daughterless (CeE/DA). However, the mutant protein blocks the activation of the promoter of a target gene. Therefore, the mutant CeTwist may cause cellular defects as a dominant negative protein by binding to target promoters as a homo- or heterodimer and then blocking transcription. Similar phenotypes as those caused by the E29K mutation were observed when amino acid substitutions in the DNA-binding domain that are associated with the human Saethre-Chotzen syndrome were engineered into the C. elegans protein. These data suggest that Saethre-Chotzen syndrome may be caused, in some cases, by dominant negative proteins, rather than by haploinsufficiency of the locus.