PIAS (protein inhibitor of activated STAT) proteins interact with and modulate the activities of various transcription factors. In this work, we demonstrate that PIAS proteins xalpha, xbeta, 1, and 3 interact with the small ubiquitin-related modifier SUMO-1 and its E2 conjugase, Ubc9, and that PIAS proteins themselves are covalently modified by SUMO-1 (sumoylated). PIAS proteins also tether other sumoylated proteins in a noncovalent fashion. Furthermore, recombinant PIASxalpha enhances Ubc9-mediated sumoylation of the androgen receptor and c-Jun in vitro. Importantly, PIAS proteins differ in their abilities to promote sumoylation in intact cells. The ability to stimulate protein sumoylation and the interaction with sumoylated proteins are dependent on the conserved PIAS RING finger-like domain. These functions are linked to the activity of PIASxalpha on androgen receptor-dependent transcription. Collectively, our results imply that PIAS proteins function as SUMO-1-tethering proteins and zinc finger-dependent E3 SUMO protein ligases, and these properties are likely to explain their ability to modulate the activities of various transcription factors.