Drosophila P elements are mobile DNA elements that encode an 87-kDa transposase enzyme and transpositional repressor proteins. One of these repressor proteins is the 207-amino-acid KP protein which is encoded by a naturally occurring P element with an internal deletion. To study the molecular mechanisms by which KP represses transposition, the protein was expressed, purified, and characterized. We show that the KP protein binds to multiple sites on the ends of P-element DNA, unlike the full-length transposase protein. These sites include the high-affinity transposase binding site, an 11-bp transpositional enhancer, and, at the highest concentrations tested, the terminal 31-hp inverted repeats. The DNA binding domain was localized to the N-terminal 98 amino acids and contains a CCHC sequence, a potential metal binding motif. We also demonstrate that the KP repressor protein can dimerize and contains two protein-protein interaction regions and that this dimerization is essential for high-affinity DNA binding.