The Wilms' tumor suppressor protein WT1 is a transcriptional regulator that plays a key role in the development of the kidneys. The transcriptional activation domain of WT1 is subject to regulation by a suppression region within the N terminus of WT1. Using a functional assay, we provide direct evidence that this requires a transcriptional cosuppressor, which we identify as brain acid soluble protein 1 (BASP1). WT1 and BASP1 associate within the nuclei of cells that naturally express both proteins. BASP1 can confer WT1 cosuppressor activity in transfection assays, and elimination of endogenous BASP1 expression augments transcriptional activation by WT1. BASP1 is present in the developing nephron structures of the embryonic kidney and, coincident with that of WT1, its expression is restricted to the highly specialized podocyte cells of the adult kidney. Taken together, our results show that BASP1 is a WT1-associated factor that can regulate WT1 transcriptional activity.