Pax7 plays critical roles in development of brain, spinal cord, neural crest and skeletal muscle. As a sequence-specific DNA-binding transcription factor, any direct functional role played by Pax7 during development is mediated through target gene selection. Thus, we have sought to identify genes targeted by Pax7 during embryonic development using an unbiased chromatin immunoprecipitation (ChIP) cloning assay to isolate cis-regulatory regions bound by Pax7 in vivo. Sequencing and genomic localization of a library of chromatin-DNA fragments bound by Pax7 has identified 34 candidate Pax7 target genes, with occupancy confirmed using independent chromatin enrichment tests (ChIP-PCR). To assess the capacity of Pax7 to regulate transcription from these loci, we have cloned alternate transcripts of Pax7 (differing significantly in their DNA binding domain) into expression vectors and transfected cultured cells with these constructs, then analysed target gene expression levels using RT-PCR. We show that Pax7 directly occupies sites within genes encoding transcription factors Gbx1 and Eya4, the neurogenic cytokine receptor CntfR, the neuronal potassium channel Kcnk2, and the signal transduction kinase Camk1d in vivo and regulates the transcriptional state of these genes in cultured cells. This analysis gives us greater insight into the direct functional role played by Pax7 during embryonic development.