Osteopontin is a secreted, integrin-binding and phosphorylated acidic glycoprotein, which has an important role in tumour progression. We have shown that Wnt, Ets, AP-1, c-jun and beta-catenin/Lef-1/Tcf-1 stimulates OPN transcription in rat mammary carcinoma cells by binding to a specific promoter sequence. However, co-repressors of OPN have not been identified. In this study, we have used the bacterial two-hybrid system to isolate cDNA-encoding proteins that bind to OPN and modulate its role in malignant transformation. Using this approach we isolated interferon-induced transmembrane protein 3 gene (IFITM3) as a potential protein partner. We show that IFITM3 and OPN interact in vitro and in vivo and that IFITM3 reduces osteopontin (OPN) mRNA expression, possibly by affecting OPN mRNA stability. Stable transfection of IFITM3 inhibits OPN, which mediates anchorage-independent growth, cell adhesion and cell invasion. Northern blot analysis revealed an inverse mRNA expression pattern of IFITM3 and OPN in human mammary cell lines. Inhibition of IFITM3 by antisense RNA promoted OPN protein expression, enhanced cell invasion by parental benign non-invasive Rama 37 cells, indicating that the two proteins interact functionally as well. We also identified an IFITM3 DNA-binding domain, which interacts with OPN, deletion of which abolished its inhibitive effect on OPN. This work has shown for the first time that IFITM3 physically interacts with OPN and reduces OPN mRNA expression, which mediates cell adhesion, cell invasion, colony formation in soft agar and metastasis in a rat model system.