Microphthalmia (mi) is a transcription factor that plays a major role in the regulation of growth and function in mast cells and melanocytes. Association of mi with other proteins is a critical step in the regulation of mi-mediated transcriptional activation. We found protein kinase C-interacting protein 1 (PKCI) specifically associated with mi in yeast two-hybrid screening. Immunoprecipitation of mi from quiescent rat basophilic leukemic cells or mouse melanocytes resulted in the specific co-immunoprecipitation of PKCI. This association was significantly reduced on engagement of the surface FcepsilonRI of mast cells or engagement of the Kit receptor on melanocytes. Hence, cell activation caused disengagement of mi from PKCI. Microphthalmia was previously shown to activate the mouse mast cell protease 6 (mMCP-6) promoter. Cotransfection of mi with PKCI in NIH 3T3 fibroblasts containing an mMCP-6 promoter-luciferase reporter demonstrated an up to 94% inhibition of mi-mediated transcriptional activation. PKCI by itself, although localized in the cytosol and nucleus of the cells, has no known physiological function and did not demonstrate transcriptional activity. Its ability to suppres mi transcriptional activity in the transient transfected fibroblast system suggests that it can function in vivo as a negative regulator of mi-induced transcriptional activation.