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LIM-homeodomain transcription factors (LIM-HD) regulate expression of genes that pattern the body and generate cell specificity during development in invertebrates and vertebrates. It is especially interesting that most are expressed in and participate in the development of the nervous system. LIM-HD proteins are themselves regulated by both intramolecular and intermolecular interactions mediated by the LIM domains. LIM domains positively regulate LIM-HD activity by promoting protein-protein interactions that allow cooperative binding to regulatory regions of tissue-specific promoters. They also negatively regulate LIM-HD activity, possibly by preventing HD association with DNA. Interaction of LIM domains with other proteins relieves this interference, permitting DNA binding and providing a mechanism for refining LIM-HD activity. The recurrence of LIM-HD proteins in fundamental developmental processes emphasizes the importance of their function and regulation and provides an opportunity to identify mechanisms and molecules underlying patterning and cell specification.