PAX6 is required for proper development of the eye, central nervous system, and nose. PAX6 has two DNA binding domains, a glycine-rich region that links the two DNA binding domains, and a transactivation domain. There is evidence that the different DNA binding domains of PAX6 have different target genes. However, it is not clear if the two DNA binding domains function independently. We have studied the effect of structural changes in the paired domain on the function of PAX6 mediated through its homeodomain. The R26G and I87R mutations have been reported in different human patients with clinically different phenotypes and are in the N- and the C-terminal halves of the paired domain, respectively. Surprisingly, we found that the I87R mutant protein not only lost the transactivation function but also failed to bind DNA by either of its DNA binding domains. In contrast, the R26G mutant protein lost DNA binding through its paired domain but had greater DNA binding and transactivation than wild-type PAX6 on homeodomain binding sites. Like R26G, the 5a isoform showed higher DNA binding than wild-type PAX6. This study demonstrates that the two subdomains of the paired domain influence the function of the homeodomain differentially and also provides an explanation for the difference in phenotypes associated with these mutations.