The mouse mammary tumor virus long terminal repeat (LTR) is a potent transcriptional enhancer. We identified several putative binding sites for the TEF-1 family of transcription factors (TEF-1, RTEF-1, DTEF-1, and ETF) in the proximal negative regulatory element of the LTR. Gel mobility shift assays revealed strong TEF-1 factor binding to one site using nuclear extracts from CV-1 cells and from the human breast cancer cell line MCF-7. Mutation of this site increased basal activity of the LTR. In transient transfection assays, TEF-1 squelched the basal LTR activity and completely abrogated the response to the glucocorticoid dexamethasone. RTEF-1 and DTEF-1 had little effect on the basal activity, whereas ETF activated the LTR. These TEF-1 factors also interfered with the response to dexamethasone. Taken together, our results reveal an important new role for TEF-1 factors in regulating MMTV LTR activity and suggest that TEF-1 factors might participate in mammary tumorigenesis.