Human heart development requires an orderly coordination of transcriptional programs, with the homeodomain protein NKX2-5 being one of the key transcription factors required for the differentiation of mesodermal progenitor cells. Indeed, lack of Nkx2-5 in mice arrests heart development prior to looping, resulting in embryonic lethality. There are 28 germline NKX2-5 mutations identified in humans that are associated with congenital heart disease, and we recently reported multiple somatic mutations in patients with complex cardiac malformations. To address the functional consequences of single and multiple mutations of NKX2-5, we developed a functional assay in the budding yeast Saccharomyces cerevisiae, which could determine transactivation capacity and specificity of expressed NKX2-5 alleles towards targeted response element (RE) sequences. We focused on mutants of the third helix, which provides DNA binding specificity, and characterized mutations that were highly associated with either ventricular (VSD) or atrioventricular (AVSD) septal defects. Individual mutants exhibited partial to complete loss of function and differences in transactivation capacity between the various REs. The mutants also exhibited gene dosage rather than dominant effects on transcription. Surprisingly, all AVSD patients (22/23) had a single K183E mutation in the DNA binding domain, which resulted in transcriptional inactivation. None of the VSD patients had this mutation; yet 14/29 had at least one mutation in the third helix leading to either inactivation or reduction of NKX2-5 transactivation. Therefore, mutations of somatic origin in the binding domains of NKX2-5 were associated specifically with AVSD or VSD and resulted in loss of protein function.