In mammals, the SRY/Sry gene on the Y chromosome is necessary and sufficient for a bipotential gonad to develop into a testis, regardless of its chromosomal sex. The SRY/Sry gene encodes a protein that belongs to a high-mobility-group (HMG) box protein family and that has been postulated to modulate the expression of genes necessary for male gonadal differentiation. Using a yeast two-hybrid screen, we identified a novel protein containing only a Krüppel-associated box (KRAB) domain, which is hereafter named KRAB-O (KRAB Only), as an SRY-interacting protein. The KRAB-O protein is encoded by an alternatively spliced transcript from the Zfp208 locus that also produces another transcript coding for a KRAB-zinc finger protein, ZFP208. The interaction of the mouse SRY with KRAB-O was further confirmed by glutathione S-transferase pull-down assay and coimmunoprecipitation in transfected COS7 cells. The KRAB-O interaction domain in both the human and mouse SRY was mapped to the bridge region outside the HMG box. Indirect immunofluorescence and confocal microscopy show that the mouse SRY colocalizes with KRAB-O in nuclear dots in transiently transfected COS7 cells and primary fetal mouse gonadal cells. Using similar approaches, we demonstrate that KRAB-O interacts directly with KAP1 (KRAB-associated protein 1), the obligatory corepressor for KRAB domain proteins. Furthermore, we show that the mouse SRY is associated indirectly with KAP1 and heterochromatin protein 1 (HP1) through its interaction with KRAB-O, suggesting that the mouse SRY could use the KRAB-KAP1-HP1 organized transcriptional regulatory complex to regulate its yet-to-be-identified downstream target genes.