The identification of ultraconserved noncoding sequences in vertebrates has been associated with developmental regulators and DNA-binding proteins. One of the first of these was identified in the intergenic region between the Dlx-5 and Dlx-6 genes, members of the Dlx/dll homeodomain-containing protein family. In previous experiments, we showed that Sonic hedgehog treatment of forebrain neural explants results in the activation of Dlx-2 and the novel noncoding RNA (ncRNA), Evf-1. In this report, we show that the Dlx-5/6 ultraconserved region is transcribed to generate an alternatively spliced form of Evf-1, the ncRNA Evf-2. Evf-2 specifically cooperates with Dlx-2 to increase the transcriptional activity of the Dlx-5/6 enhancer in a target and homeodomain-specific manner. A stable complex containing the Evf-2 ncRNA and the Dlx-2 protein forms in vivo, suggesting that the Evf-2 ncRNA activates transcriptional activity by directly influencing Dlx-2 activity. These experiments identify a novel mechanism whereby transcription is controlled by the cooperative actions of an ncRNA and a homeodomain protein. The possibility that a subset of vertebrate ultraconserved regions may function at both the DNA and RNA level to control key developmental regulators may explain why ultraconserved sequences exhibit 90% or more conservation even after 450 million years of vertebrate evolution.