t(8;21) and t(16;21) create two fusion proteins, AML-1-ETO and AML-1-MTG16, respectively, which fuse the AML-1 DNA binding domain to putative transcriptional corepressors, ETO and MTG16. Here, we show that distinct domains of ETO contact the mSin3A and N-CoR corepressors and define two binding sites within ETO for each of these corepressors. In addition, of eight histone deacetylases (HDACs) tested, only the class I HDACs HDAC-1, HDAC-2, and HDAC-3 bind ETO. However, these HDACs bind ETO through different domains. We also show that the murine homologue of MTG16, ETO-2, is also a transcriptional corepressor that works through a similar but distinct mechanism. Like ETO, ETO-2 interacts with N-CoR, but ETO-2 fails to bind mSin3A. Furthermore, ETO-2 binds HDAC-1, HDAC-2, and HDAC-3 but also interacts with HDAC-6 and HDAC-8. In addition, we show that expression of AML-1-ETO causes disruption of the cell cycle in the G(1) phase. Disruption of the cell cycle required the ability of AML-1-ETO to repress transcription because a mutant of AML-1-ETO, Delta469, which removes the majority of the corepressor binding sites, had no phenotype. Moreover, treatment of AML-1-ETO-expressing cells with trichostatin A, an HDAC inhibitor, restored cell cycle control. Thus, AML-1-ETO makes distinct contacts with multiple HDACs and an HDAC inhibitor biologically inactivates this fusion protein.