EXD acts as a cofactor with homeotic genes in transcriptional activation. This can be shown phenotypically by generating clones of mutant exd cells in flies and observing the resultant adult patterns. One area of research investigates how transcription factors interact to achieve specific binding to DNA and consequent transcriptional activation. This information is important because of the pervasive influence of homeotic proteins on morphogenesis.
Homeobox genes recognize more or less the same consensus DNA sequence.
Cofactors such as EXD increase the binding specificity of homeotic genes to DNA, and thus provide a mechanism that explains the specific effects of homeobox genes. The biochemical basis of EXD interaction with homeotic genes has been studied intensively. Ultrabithorax is one EXD partner in gene activation. The best characterized enhancer element DNA binding site for EXD-UBX interaction is the parasegment 7 enhancer responsible for activation of decapentaplegic in the visceral mesoderm . Binding sites for the two transcription factors EXD and UBX on a dpp midgut enhancer fragment are close enough to partially overlap.