The Wilms' tumour suppressor protein WT1 contains a transcriptional regulatory domain that can either activate or repress transcription depending upon its cellular environment. The mechanistic basis for this dichotomy is unclear however. Here, we dissect the transcriptional regulatory domains of WT1. We find that a region within the domain of WT1 attributed to transcriptional repression is a potent suppressor of the activation domain at several promoters and in different cell types. In vitro transcription analysis suggests that the mechanism of suppression of the activation domain occurs at the level of transcription initiation. Furthermore we find that the WT1 suppression domain is able to inhibit a heterologous activation domain when fused in cis. Dissection of this domain resulted in the delineation of a 30 amino acid region that was sufficient to confer suppression of a transcriptional activation domain both in vivo and in vitro. Additionally, we find that the WT1 transcriptional activation domain interacts with the general transcription factor TFIIB and that this interaction is not affected by the suppression domain. Taken together, these studies suggest that the suppression domain of WT1 interacts with a cosuppressor protein to mediate inhibition of the WT1 transcriptional activation domain.