Setleis Syndrome (OMIM ID: 227260) is a rare autosomal recessive disease characterized by abnormal facial development. Recently, we have reported that two nonsense mutations (c.486C>T [Q119X] and c.324C>T [Q65X]) of the basic helix-loop-helix (bHLH) transcription factor TWIST2 cause Setleis Syndrome. Here we show that periostin, a cell adhesion protein involved in connective tissue development and maintenance, is down-regulated in Setleis Syndrome patient fibroblast cells and that periostin positively responds to manipulations in TWIST2 levels, suggesting that TWIST2 is a transactivator of periostin. Functional analysis of the TWIST2 mutant form (Q119X) revealed that it maintains the ability to localize to the nucleus, forms homo and heterodimers with the ubiquitous bHLH protein E12, and binds to dsDNA. Reporter gene assays using deletion constructs of the human periostin promoter also reveal that TWIST2 can activate this gene more specifically than Twist1, while the Q119X mutant results in no significant transactivation. Chromatin immunoprecipitation assays show that both wild-type TWIST2 and the Q119X mutant bind the periostin promoter, however only wild-type TWIST2 is associated with higher levels of histone acetylation across the 5'-regulatory region of periostin. Taken together, these data suggest that the C-terminal domain of TWIST2, which is missing in the Q119X mutant form of TWIST2, is responsible for proper transactivation of the periostin gene. Improper regulation of periostin by the mutant form of TWIST2 could help explain some of the soft tissue abnormalities seen in these patients therefore providing a genotype-phenotype relationship for Setleis Syndrome.