Mutations in the human PAX6 gene produce various phenotypes, including aniridia, Peters' anomaly, autosomal dominant keratitis and familial foveal dysplasia. The various phenotypes may arise from different mutations in the same gene. To test this theory, we performed a functional analysis of two missense mutations in the paired domain: the R26G mutation, previously reported in a case of Peters' anomaly, and an unreported I87R mutation, which we identified in a patient with aniridia. While both the R26 and the I87 positions are conserved in the paired boxes of all known PAX genes, X-ray crystallography has shown that only R26 makes contact with DNA. We showed that the R26G mutant failed to bind a subset of paired domain binding sites but, surprisingly, bound other sites and successfully transactivated promoters containing those sites. In contrast, the I87R mutant had lost the ability to bind DNA at all tested sites and failed to transactivate promoters. Our data support the haploid-insufficiency hypothesis of aniridia, and the hypothesis that R26G is a hypomorphic allele.