Dosage compensation in Drosophila melanogaster involves the selective targeting of the male X chromosome by the dosage compensation complex (DCC) and the coordinate, approximately 2-fold activation of most genes. The principles that allow the DCC to distinguish the X chromosome from the autosomes are not understood. Targeting presumably involves DNA sequence elements whose combination or enrichment mark the X chromosome. DNA sequences that characterize 'chromosomal entry sites' or 'high-affinity sites' may serve such a function. However, to date no DNA binding domain that could interpret sequence information has been identified within the subunits of the DCC. Early genetic studies suggested that MSL1 and MSL2 serve to recognize high-affinity sites (HAS) in vivo, but a direct interaction of these DCC subunits with DNA has not been studied. We now show that recombinant MSL2, through its CXC domain, directly binds DNA with low nanomolar affinity. The DNA binding of MSL2 or of an MSL2-MSL1 complex does not discriminate between different sequences in vitro, but in a reporter gene assay in vivo, suggesting the existence of an unknown selectivity cofactor. Reporter gene assays and localization of GFP-fusion proteins confirm the important contribution of the CXC domain for DCC targeting in vivo.