The molecular dissection of desiccation tolerance in the resurrection plant Craterostigma plantagineum led to the isolation of two dehydration-stress inducible homeodomain-leucine zipper genes (CPHB-1 and -2). When the coding region of CPHB-1 was used as bait in the yeast two-hybrid system, the ability of CPHB-1 to form homodimers was demonstrated. The two-hybrid system was also used to isolate CPHB-2, which heterodimerises with CPHB-1. Both transcripts are inducible by dehydration in leaves and roots, but steady state levels vary in response to exogenously applied ABA. Although expression of CPHB-1 is not inducible by ABA, the transcript level of CPHB-2 increases during ABA-treatment. Both genes are expressed at very early stages of dehydration and thus may be involved in the regulation of gene expression during dehydration. CPHB-1 and -2 differential expression in response to ABA suggests that they act in different branches of the dehydration-induced signalling network. In vitro binding studies revealed that CPHB-1 specifically binds to the pseudopalindromic sequence CAAT(C/G)ATTG. Using this element for in vitro binding studies with nuclear proteins from dehydrated leaves, an inducible DNA-protein complex was identified.