ATHB17 (AT2G01430) is an Arabidopsis gene encoding a member of the α-subclass of the homeodomain leucine zipper class II (HD-Zip II) family of transcription factors. The ATHB17 monomer contains four domains common to all class II HD-Zip proteins: a putative repression domain adjacent to a homeodomain, leucine zipper, and carboxy terminal domain. However, it also possesses a unique N-terminus not present in other members of the family. In this study we demonstrate that the unique 73 amino acid N-terminus is involved in regulation of cellular localization of ATHB17. The ATHB17 protein is shown to function as a transcriptional repressor and an EAR-like motif is identified within the putative repression domain of ATHB17. Transformation of maize with an ATHB17 expression construct leads to the expression of ATHB17Δ113, a truncated protein lacking the first 113 amino acids which encodes a significant portion of the repression domain. Because ATHB17Δ113 lacks the repression domain, the protein cannot directly affect the transcription of its target genes. ATHB17Δ113 can homodimerize, form heterodimers with maize endogenous HD-Zip II proteins, and bind to target DNA sequences; thus, ATHB17Δ113 may interfere with HD-Zip II mediated transcriptional activity via a dominant negative mechanism. We provide evidence that maize HD-Zip II proteins function as transcriptional repressors and that ATHB17Δ113 relieves this HD-Zip II mediated transcriptional repression activity. Expression of ATHB17Δ113 in maize leads to increased ear size at silking and, therefore, may enhance sink potential. We hypothesize that this phenotype could be a result of modulation of endogenous HD-Zip II pathways in maize.