The transcription factor c-Jun cooperates with oncogenic alleles of ras in malignant transformation. Constitutively active Ras causes, via activation of mitogen activated protein kinases, phosphorylation of c-Jun which is essential for subsequent target gene activation and tumorigenesis. Studying the mechanisms controlling c-Jun activity we found that its transcription activation function is actively repressed by a presumably multimeric repressor complex that includes histone deacetylase 3 as a critical subunit. Suppression of c-Jun is relieved by MAP kinase-mediated phosphorylation and/or titration of inhibitor components. The viral tumorigenic counterpart of c-Jun, v-Jun, escapes this inhibition, suggesting deregulated transcriptional activity of c-Jun as a relevant cause for carcinogenesis.