Transcription factor AP-1 is constituted by the products of the various fos and jun genes. AP-1 activity is modulated by second messengers and appears to involve post-translational modifications of Fos and Jun. It has been shown that phosphorylation mediated by glycogen synthase kinase 3 (GSK-3) is involved in negative regulation of c-Jun DNA-binding function in vitro. Here we show that two forms of GSK-3 function to decrease the DNA-binding activity as well as the transcriptional activation elicited by c-Jun in vivo. Similarly, the other members of the jun family, JunB, JunD and v-Jun, are negatively regulated by GSK-3 in vivo, although to a slightly lesser extent than c-Jun. We have also tested the proteins encoded by the Drosophila shaggy gene (sgg) in our assays. The sgg proteins share homology with the mammalian GSK-3 and appear to be important for the normal segregation of bristle precursor cells in the imaginal epithelium in Drosophila. Here we show that the products of the sgg gene can also function as negative regulators of Jun/AP-1.