The identities of signal transducer proteins that integrate histone hypoacetylation and transcriptional repression are largely unknown. Here we demonstrate that THAP7, an uncharacterized member of the recently identified THAP (Thanatos-associated protein) family of proteins, is ubiquitously expressed, associates with chromatin, and represses transcription. THAP7 binds preferentially to hypoacetylated (un-, mono-, and diacetylated) histone H4 tails in vitro via its C-terminal 77 amino acids. Deletion of this domain, or treatment of cells with the histone deacetylase inhibitor TSA, which leads to histone hyperacetylation, partially disrupts THAP7/chromatin association in living cells. THAP7 coimmunoprecipitates with histone deacetylase 3 (HDAC3) and the nuclear hormone receptor corepressor (NCoR) and represses transcription as a Gal4 fusion protein. Chromatin immunoprecipitation assays demonstrate that these corepressors are recruited to promoters in a THAP7 dependent manner and promote histone H3 hypoacetylation. The conserved THAP domain is a key determinant for full HDAC3 association in vitro, and both the THAP domain and the histone interaction domain are important for the repressive properties of THAP7. Full repression mediated by THAP7 is also dependent on NCoR expression. We hypothesize that THAP7 is a dual function repressor protein that actively targets deacetylation of histone H3 necessary to establish transcriptional repression and functions as a signal transducer of the repressive mark of hypoacetylated histone H4. This is the first demonstration of the transcriptional regulatory properties of a human THAP domain protein, and a critical identification of a potential transducer of the repressive signal of hypoacetylated histone H4 in higher eukaryotes.