The Hox family of homeodomain transcription factors regulate numerous pathways during developmental and normal cellular processes. All Hox proteins recognise similar sequences in vitro yet display functional diversity in an in vivo environment. This review focuses on the transcriptional and functional specificity elicited by Hox proteins, giving an overview of homeodomain-DNA interactions and the gain of binding specificity through cooperative binding with cofactors. Furthermore, currently identified mammalian Hox target genes are presented, of which the most striking feature is that very few direct Hox targets have been identified. The direct targets participate in an array of cellular functions including organogenesis and cellular differentiation, cell adhesion and migration and cell cycle and apoptotic pathways. A further assessment of identified mammalian promoter targets and the contribution of bases outside the canonical recognition motif is given, highlighting roles they may play in either trans-activation or repression by Hox proteins.