Histone acetyltransferases and deacetylases are recruited by transcription factors and adapter proteins to regulate specific subsets of target genes. We were interested in identifying interaction partners of histone deacetylase 1 (HDAC1) that might be involved in conferring target or substrate specificity. Using the yeast two-hybrid system, we isolated the repressor of estrogen receptor activity (REA) as a novel HDAC1-associated protein. We demonstrated the in vivo interaction of REA with HDAC1 and characterized the respective domains required for their interaction in vitro. In addition, we found that REA also associates with the class II histone deacetylase HDAC5. In luciferase reporter assays, REA decreased transcription, and this repression was sensitive to the deacetylase inhibitor trichostatin A. Finally, we showed that REA specifically interacts with the chicken ovalbumin upstream binding transcription factors and II. The nuclear receptor chicken ovalbumin upstream binding transcription factor I was found to cooperate with REA and histone deacetylases in the repression of target genes. We, therefore, propose a novel function for REA as a mediator of transcriptional repression by nuclear hormone receptors via recruitment of histone deacetylases.