The promyelocytic leukemia protein (PML) is a nuclear phosphoprotein with growth- and transformation-suppressing ability. Having previously shown it to be a transcriptional repressor of the epidermal growth factor receptor (EGFR) gene promoter, we have now shown that PML's repression of EGFR transcription is caused by inhibition of EGFR's Sp1-dependent activity. On functional analysis, the repressive effect of PML was mapped to a 150-bp element (the sequences between -150 and -16, relative to the ATG initiation site) of the promoter. Transient transfection assays with Sp1-negative Drosophila melanogaster SL2 cells showed that the transcription of this region was regulated by Sp1 and that the Sp1-dependent activity of the promoter was suppressed by PML in a dose-dependent manner. Coimmunoprecipitation and mammalian two-hybrid assays demonstrated that PML and Sp1 were associated in vivo. In vitro binding by means of the glutathione S-transferase (GST) pull-down assay, using the full-length and truncated GST-Sp1 proteins and in vitro-translated PML, showed that PML and Sp1 directly interacted and that the C-terminal (DNA-binding) region of Sp1 and the coiled-coil (dimerization) domain of PML were essential for this interaction. Analysis of the effects of PML on Sp1 DNA binding by electrophoretic mobility shift assay (EMSA) showed that PML could specifically disrupt the binding of Sp1 to DNA. Furthermore, cotransfection of PML specifically repressed Sp1, but not the E2F1-mediated activity of the dihydrofolate reductase promoter. Together, these data suggest that the association of PML and Sp1 represents a novel mechanism for negative regulation of EGFR and other Sp1 target promoters.