We isolated a novel gene encoding a zinc finger protein from Xenopus laevis, designated NZFP that interacts with the TATA-binding protein (TBP). NZFP contains a highly conserved sequence designated finger associated box (FAX) and SUMO-1 consensus-binding motifs at the N-terminal half and 10 C2H2 type zinc finger motifs at the C-terminal half, respectively. Deletion mutants of NZFP fused with the Gal4 DNA binding domain were used to determine the function of NZFP during gene transcription by transfecting them into a Xenopus kidney cell line. Both full-length NZFP and the FAX domain repressed transcription activity by 3-5-fold. Moreover, an in vitro pull-down assay showed that the C-terminal core domain of TBP makes direct contact with the N-terminal portion of NZFP. We also found through chromatin immunoprecipitation experiments that the interaction between NZFP and TBP inhibits binding of TFIIA and TFIIB. These data strongly suggest that the repression by NZFP occurs through its binding to both DNA and TBP and the resulting NZFP-TBP-promoter complex inhibits preinitiation complex assembly by preventing binding of TFIIA and TFIIB.