Heat shock factor (HSF) 1 is the major heat shock transcription factor that regulates stress-inducible synthesis of heat shock proteins and is also essential in protection against endotoxic shock. Following our previous study, which demonstrated the transcriptional repression of the IL-1beta gene by HSF1 (Cahill, C. M., Waterman, W. R., Xie, Y., Auron, P. E., and Calderwood, S. K. (1996) J. Biol. Chem. 271, 24874-24879), we have examined the mechanisms of transcriptional repression. Our studies show that HSF1 represses the lipopolyliposaccharide-induced transcription of the IL-1beta promoter through direct interaction with the nuclear factor of interleukin 6 (NF-IL6, also known as CCAAT enhancer binding protein (C/EBPbeta), an essential regulator in IL-1beta transcription. We show for the first time that HSF1 binds directly to NF-IL6 in vivo and antagonizes its activity. The HSF1/NF-IL6 interaction involves a sequence of HSF1 containing the trimerization and regulatory domains and the bZip region of NF-IL6. HSF1 has little effect on IL-1beta promoter activity stimulated by the essential monocytic transcription factor Spi.1 but is strongly inhibitory to transcriptional activation by NF-IL6 and to the synergistic activation by NF-IL6 and Spi.1. Because of its ability to bind to specific C/EBP elements in the promoters of multiple genes and its ability to interact with other transcription factors, NF-IL6 is involved in transcriptional regulation of a wide range of genes. Interaction between HSF1 and NF-IL6 could thus be an important mechanism in HSF1 regulation of general gene transcription during endotoxin stress.