Recently we demonstrated that the ability of tumor necrosis factor alpha (TNFalpha) to stimulate the human cytomegalovirus (HCMV) IE1/2 enhancer/promoter activity in myeloid progenitor-like cells decreases when these cells differentiate into promonocytic cells. In addition, TNFalpha stimulation in the progenitor-like cell line HL-60 was shown to be mediated by nuclear factor kappaB (NF-kappaB) activation and its binding to the 18-base pair sequence motifs of the IE1/2 enhancer. We demonstrate here that the cell differentiation-dependent reduction of TNFalpha stimulation is not due to insufficient NF-kappaB activation but correlates with increased synthesis of the monocyte differentiation-associated factors CCAAT/enhancer-binding protein (C/EBP) alpha and beta. Overexpression of C/EBPalpha/beta in HL-60 cells, which normally produce only very small amounts of C/EBP, stimulated the basal activity of the promoter in the absence of NF-kappaB but suppressed the stimulatory effect of TNFalpha. A novel C/EBP-binding site was identified in the IE1/2 enhancer directly downstream of a NF-kappaB site. In order to understand the mechanisms of interaction, we used an IE1/2 promoter mutant that failed to bind C/EBP at this position and several constructs that contained exclusively NF-kappaB- and/or C/EBP-binding sites upstream of the minimal IE1/2 promoter. We could demonstrate that C/EBPalpha/beta interacts with NF-kappaB p65 and displays inhibitory activity even in the absence of direct DNA binding by forming p65-C/EBP-containing protein complexes bound to the NF-kappaB site. Moreover, C/EBP binding to the DNA adjacent to NF-kappaB supports the down-regulatory effect of C/EBPs possibly due to stabilization of a multimeric NF-kappaB-C/EBP complex. Our results show that cell differentiation factors may interfere with TNFalpha-induced human cytomegalovirus gene (re)activation.