Germ-line mutations in BRCA1 predispose individuals to breast and ovarian cancers. We observed a novel endogenous association of BRCA1 with Nmi (N-Myc-interacting protein) in breast cancer cells. Nmi was found to interact specifically with BRCA1, both in vitro and in vivo, by binding to two major domains in BRCA1, amino acid residues 298-683 and 1301-1863. Homodimerization of Nmi enhanced its association with BRCA1. Nmi functioned as an adaptor molecule to recruit c-Myc to a complex containing Nmi.c-Myc.BRCA1. Because c-Myc can activate transcription of the human telomerase reverse transcriptase gene (hTERT), we addressed the role of BRCA1 and Nmi in modulating c-Myc-induced hTERT promoter activity. Although Nmi or BRCA1 alone had no effect on c-Myc induced hTERT promoter activity, BRCA1 together with Nmi significantly inhibited this c-Myc induced hTERT promoter activity ( approximately 75% inhibition). Two mutated forms of BRCA1, a missense (A1708E) and a nonsense (Y1853X) that have been identified in familial breast cancers, associated with Nmi and c-Myc but failed to suppress c-Myc-induced hTERT promoter activity. These results demonstrate a novel pathogenic mechanism whereby mutations in BRCA1, via a novel transcription factor complex containing BRCA1, c-Myc, and Nmi, impair inhibition of c-Myc-induced hTERT promoter activity, which allows sustained activation of telomerase, a key enzyme in carcinogenesis.