During animal development, transcription factor activities are modulated by several means, including subcellular localization. The Hox cofactor Extradenticle (Exd) has a dynamic subcellular localization, such that Exd is cytoplasmic by default, but is nuclear when complexed with another homeodomain protein, Homothorax (Hth). These observations raise the question of whether dimerization with Hth simply induces Exd's nuclear localization or, alternatively, if Hth is also necessary for Exd activity. To address this question, we analyzed the nuclear transport signals in Exd, including a divergent nuclear export signal (NES) and two nuclear localization signals (NLSs). We show that, although these signals are weak compared to canonical signals, they balance each other in Exd. We also provide evidence that Exd contains an NLS mask that contributes to its cytoplasmic localization. With these signals characterized, we generated forms of Exd that are nuclear localized in the absence of Hth. Surprisingly, although these Exd forms are functional, they do not phenocopy Hth overexpression. These findings suggest that Hth is required for Exd activity, not simply for inducing its nuclear localization.