Transcription requires the progression of RNA polymerase II (RNAP II) through a permissive chromatin structure. Recent studies of Saccharomyces cerevisiae have demonstrated that the yeast Sin3 protein contributes to the restoration of the repressed chromatin structure at actively transcribed loci. Yet, the mechanisms underlying the restoration of the repressive chromatin structure at transcribed loci and its significance in gene expression have not been investigated in mammals. We report here the identification of a mammalian complex containing the corepressor Sin3B, the histone deacetylase HDAC1, Mrg15, and the PHD finger-containing Pf1 and show that this complex plays important roles in regulation of transcription. We demonstrate that this complex localizes at discrete loci approximately 1 kb downstream of the transcription start site of transcribed genes, and this localization requires both Pf1's and Mrg15's interaction with chromatin. Inactivation of this mammalian complex promotes increased RNAP II progression within transcribed regions and subsequent increased transcription. Our results define a novel mammalian complex that contributes to the regulation of transcription and point to divergent uses of the Sin3 protein homologues throughout evolution in the modulation of transcription.