The v-rel oncogene is the most efficient transforming member of the Rel/NF-kappaB family of transcription factors. v-Rel induces avian and mammalian lymphoid cell tumors and transforms chicken embryo fibroblasts in culture by the aberrant regulation of genes under the control of Rel/NF-kappaB proteins. Here we report that the expression of SH3BGRL, a member of the SH3BGR (SH3 domain-binding glutamic acid-rich) family of proteins, is downregulated in v-Rel-expressing fibroblasts, lymphoid cells, and splenic tumor cells. Chromatin immunoprecipitation experiments demonstrated that v-Rel binds to the sh3bgrl promoter in transformed cells. Coexpression of SH3BGRL with v-Rel in primary splenic lymphocytes reduced the number of colonies formed by 76%. Mutations in the predicted SH3-binding domain of SH3BGRL abolished the suppressive effect on v-Rel transformation and resulted in colony numbers comparable to those formed by v-Rel alone. However, mutations in the predicted EVH1-binding domain of SH3BGRL only had a modest effect on suppression of v-Rel transformation. This study provides the first example of a gene that is downregulated in v-Rel-expressing cells that also plays a role in v-Rel transformation.