Daxx-mediated transcriptional repression was modulated by a speckled POZ domain protein SPOP which was first identified as an autoantigen from the serum of a scleroderma patient. This is the first report on the biochemical and functional interactions between Daxx and SPOP. The COOH-terminal region of Daxx interacts with the NH2-terminal region of SPOP. SPOP reversed the transcriptional repression mediated by Daxx which binds with ETS1 transcription factor to repress ETS1-responsive gene expression. Mutagenesis study suggests that the ability of SPOP to self-associate as well as its ability to bind with Daxx was important for the modulation of Daxx-mediated transcriptional repression.