The c-myc protein (Myc) contains an amino-terminal transcriptional activation domain and a carboxy-terminal basic helix-loop-helix-leucine zipper (bHLH-Z) domain that directs dimerization of Myc with its partner, the max protein (Max), and promotes DNA binding to sites containing a CACGTG core consensus sequence. Despite these characteristics and the observation that Myc can modulate gene expression, a direct role for Myc or Max as transcription factors has never been demonstrated. Here we use Saccharomyces cerevisiae as an in vivo model system to show that the Myc protein is a sequence-specific transcriptional activator whose DNA binding is strictly dependent on dimerization with Max. Transactivation is mediated by the amino-terminal domain of Myc. We find that Max homodimers bind to the same DNA sequence as Myc+Max but that they fail to transactivate and thus can antagonize Myc+Max function. We also show that the Max HLH-Z domain has a higher affinity for the Myc HLH-Z domain than for itself, and suggest that the heterodimeric Myc+Max activator forms preferentially at equilibrium.