Dimerization is proposed to be a regulatory mechanism for TATA-binding protein (TBP) activity bothin vitro andin vivo. The reversible dimer-monomer transition of TBP is influenced by the buffer conditionsin vitro. Usingin vitro chemical cross-linking, we found yeast TBP (yTBP) to be largely monomeric in the presence of the divalent cation Mg2+, even at high salt concentrations. Apparent molecular mass of yTBP at high salt with Mg2+, run through a gel filtration column, was close to that of monomeric yTBP. Lowering the monovalent ionic concentration in the absence of Mg2+, resulted in dimerization of TBP. Effect of Mg2+ was seen at two different levels: at higher TBP concentrations, it suppressed the TBP dimerization and at lower TBP levels, it helped keep TBP monomers in active conformation (competent for binding TATA box), resulting in enhanced TBP-TATA complex formation in the presence of increasing Mg2+. At both the levels, activity of the full-length TBP in the presence of Mg2+ was like that reported for the truncated C-terminal domain of TBP from which the N-terminus is removed. Therefore for full-length TBP, intra-molecular interactions can regulate its activity via a similar mechanism.