The subtle effects of DNA-protein recognition are illustrated in the homeodomain fold. This is one of several small DNA binding motifs that, in spite of limited DNA binding specificity, adopts crucial, specific roles when incorporated in a transcription factor. The homeodomain is composed of a 3-helix domain and a mobile N-terminal arm. Helix 3 (the recognition helix) interacts with the DNA bases through the major groove, while the N-terminal arm becomes ordered upon binding a specific sequence through the minor groove. Although many structural studies have characterized the DNA binding properties of homeodomains, the factors behind the binding specificity are still difficult to elucidate. A crystal structure of the Pdx1 homeodomain bound to DNA (PDB 2H1K) obtained previously in our lab shows two complexes with differences in the conformation of the N-terminal arm, major groove contacts, and backbone contacts, raising new questions about the DNA recognition process by homeodomains. Here, we carry out fully atomistic Molecular Dynamics simulations both in crystal and aqueous environments in order to elucidate the nature of the difference in binding contacts. The crystal simulations reproduce the X-ray experimental structures well. In the absence of crystal packing constraints, the differences between the two complexes increase during the solution simulations. Thus, the conformational differences are not an artifact of crystal packing. In solution, the homeodomain with a disordered N-terminal arm repositions to a partially specific orientation. Both the crystal and aqueous simulations support the existence of different stable binding conformers identified in the original crystallographic data with different degrees of specificity. We propose that protein-protein and protein-DNA interactions favor a subset of the possible conformations. This flexibility in DNA binding may facilitate multiple functions for the same transcription factor. 