Cleidocranial dysplasia (CCD) is caused by haploinsufficiency in RUNX2 function. We have previously identified a series of RUNX2 mutations in Korean CCD patients, including a novel R131G missense mutation in the Runt-homology domain. Here, we examine the functional consequences of the RUNX2(R131G) mutation, which could potentially affect DNA binding, nuclear localization signal, and/or heterodimerization with core-binding factor-beta (CBF-beta). Immunofluorescence microscopy and western blot analysis with subcellular fractions show that RUNX2(R131G) is localized in the nucleus. Immunoprecipitation analysis reveals that heterodimerization with CBF-beta is retained. However, precipitation assays with biotinylated oligonucleotides and reporter gene assays with RUNX2 responsive promoters together reveal that DNA-binding activity and consequently the transactivation of potential of RUNX2(R131G) is abrogated. We conclude that loss of DNA binding, but not nuclear localization or CBF-beta heterodimerization, causes RUNX2 haploinsufficiency in patients with the RUNX2(R131G) mutation. Retention of specific functions including nuclear localization and binding to CBF-beta of the RUNX2(R131G) mutation may render the mutant protein an effective competitor that interferes with wild-type function.