This paper concerns the manner in which combinatorial mating proteins of the fungus, Schizophyllum commune, recognize one another to form complexes that regulate target gene expression. In Schizophyllum, tightly linked Y and Z mating-type genes do not promote development in the combinations present in haploid strains (i.e., self combinations). When the Y and Z genes from two different mating types are brought together by the fusion of two haploid cells, the Y and Z proteins from different mating types recognize one another as nonself, form a complex and activate development. Several Y and Z alleles are present in the population and all nonself combinations of Y and Z alleles are equally functional. We have made chimeric genes among Y1, Y3, Y4 and Y5 and examined their mating-type specificities by transformation and mating tests. These studies show that the specificity of Y protein recognized by Z protein is encoded within a short region of N-terminal amino acids. The critical region is not precisely the same in each Y protein and in each Y-Z protein interaction. For Y3 protein compared with Y4 protein, the critical residues are in an N-terminal region of 56 amino acids (residues 17-72), with 40% identity and 65% similarity. Two-hybrid studies show that: the first 144 amino acids of Y4 protein are sufficient to bind Z3 and Z5 proteins, but not Z4 protein, and proteins deleted of the Y4 specificity region do not bind Z3, Z4 or Z5 protein. Thus the specificity determinant of the Y protein is essential for protein-protein recognition, Y-Z protein binding and mating activity.