Few genetically dominant mutations involved in human disease have been fully explained at the molecular level. In cases where the mutant gene encodes a transcription factor, the dominant-negative mode of action of the mutant protein is particularly poorly understood. Here, we studied the genome-wide mechanism underlying a dominant-negative form of the SOX18 transcription factor (SOX18^RaOp) responsible for both the classical mouse mutant Ragged Opossum and the human genetic disorder Hypotrichosis-lymphedema-telangiectasia-renal defect syndrome. Combining three single-molecule imaging assays in living cells together with genomics and proteomics analysis, we found that SOX18^RaOp disrupts the system through an accumulation of molecular interferences which impair several functional properties of the wild-type SOX18 protein, including its target gene selection process. The dominant-negative effect is further amplified by poisoning the interactome of its wild-type counterpart, which perturbs regulatory nodes such as SOX7 and MEF2C. Our findings explain in unprecedented detail the multi-layered process that underpins the molecular aetiology of dominant-negative transcription factor function.