α-Fetoprotein (AFP) is known to be highly produced in fetal liver despite its barely detectable level in normal adult liver. On the other hand, hepatocellular carcinoma often shows high expression of AFP. Thus, AFP seems to be an oncogenic marker. In our present study, we investigated how TGF-β signaling cooperates with AT motif-binding factor-1 (ATBF1) to inhibit AFP transcription. Indeed, the expression of AFP mRNA in HuH-7 cells was negatively regulated by TGF-β signaling. To further understand how TGF-β suppresses the transcription of the AFP gene, we analyzed the activity of the AFP promoter in the presence of TGF-β. We found that the TGF-β signaling and ATBF1 suppressed AFP transcription through two ATBF1 binding elements (AT-motifs). Using a heterologous reporter system, both AT-motifs were required for transcriptional repression upon TGF-β stimulation. Furthermore, Smads were found to interact with ATBF1 at both its N-terminal and C-terminal regions. Since the N-terminal (ATBF1N) and C-terminal regions of ATBF1 (ATBF1C) lack the ability of DNA binding, both truncated mutants rescued the cooperative inhibitory action by the TGF-β signaling and ATBF1 in a dose-dependent manner. Taken together, these findings indicate that TGF-β signaling can act in concert with ATBF1 to suppress the activity of the AFP promoter through direct interaction of ATBF1 with Smads.