Pax3 is a transcription factor which functions in embryonic development and human diseases. In a yeast two-hybrid screen with full-length Pax3 as bait, we isolated a clone encoding transcriptional co-activator with PDZ-binding motif (TAZ) from an E10.5 mouse embryo cDNA library. Co-immunoprecipitation and nuclear co-localization of TAZ with Pax3 suggest that their association is functionally relevant. In situ hybridization revealed TAZ and Pax3 expression to partially overlap in the paraxial mesoderm, limb buds, and the neural tube. In C2C12 myoblast cells and NIH3T3 cells, TAZ enhanced the transcriptional activity of Pax3 on artificial and microphthalmia-associated transcription factor promoter-luciferase constructs, suggesting that TAZ can function as a co-activator of Pax3. Functional interaction between Pax3 and TAZ may provide a clue to clarifying the mechanism by which Pax3 serves as a transcriptional activator during embryogenesis. (c) 2005 Elsevier Inc. All rights reserved.