The LIM‐only protein Lmo2, activated by chromosomal translocations in T‐cell leukaemias, is normally expressed in haematopoiesis. It interacts with TAL1 and GATA‐1 proteins, but the function of the interaction is unexplained. We now show that in erythroid cells Lmo2 forms a novel DNA‐binding complex, with GATA‐1, TAL1 and E2A, and the recently identified LIM‐binding protein Ldb1/NLI. This oligomeric complex binds to a unique, bipartite DNA motif comprising an E‐box, CAGGTG, followed∼ 9 bp downstream by a GATA site. In vivo assembly of the DNA‐binding complex requires interaction of all five proteins and establishes a transcriptional transactivating complex. These data demonstrate one function for the LIM‐binding protein Ldb1 and establish a function for the LIM‐only protein Lmo2 as an obligatory component of an oligomeric, DNA‐binding complex which may play a role in haematopoiesis.