Pax-6 is an evolutionarily conserved transcription factor regulating brain and eye development. Four Pax-6 isoforms have been reported previously. Although the longer Pax-6 isoforms (p46 and p48) bear two DNA-binding domains, the paired domain (PD) and the homeodomain (HD), the shorter Pax-6 isoform p32 contains only the HD for DNA binding. Although a third domain, the proline-, serine- and threonine-enriched activation (PST) domain, in the C termini of all Pax-6 isoforms mediates their transcriptional modulation via phosphorylation, how p32 Pax-6 could regulate target genes remains to be elucidated. In the present study, we show that sumoylation at K91 is required for p32 Pax-6 to bind to a HD-specific site and regulate expression of target genes. First, in vitro-synthesized p32 Pax-6 alone cannot bind the P3 sequence, which contains the HD recognition site, unless it is preincubated with nuclear extracts precleared by anti-Pax-6 but not by anti-small ubiquitin-related modifier 1 (anti-SUMO1) antibody. Second, in vitro-synthesized p32 Pax-6 can be sumoylated by SUMO1, and the sumoylated p32 Pax-6 then can bind to the P3 sequence. Third, Pax-6 and SUMO1 are colocalized in the embryonic optic and lens vesicles and can be coimmunoprecipitated. Finally, SUMO1-conjugated p32 Pax-6 exists in both the nucleus and cytoplasm, and sumoylation significantly enhances the DNA-binding ability of p32 Pax-6 and positively regulates gene expression. Together, our results demonstrate that sumoylation activates p32 Pax-6 in both DNA-binding and transcriptional activities. In addition, our studies demonstrate that p32 and p46 Pax-6 possess differential DNA-binding and regulatory activities.