The chromosome 11p13 Wilms' tumor locus (wt1) encodes a zinc finger-containing transcription factor (WT1). WT1 binds to the consensus sequence (5'-GCGGGGGCG-3') and represses transcription when bound to this site in vivo. The mechanism of repression is not yet defined. To investigate the mechanisms of transcriptional repression and map the domains of WT1 responsible, we constructed hybrid proteins between the yeast GAL4 1-147 DNA binding domain and WT1. Fusion of a 298 amino acid glutamine-proline-rich N-terminal segment of WT1 to the GAL4 DNA binding domain created a potent transcriptional repressor. The use of N- and C-terminal truncations of this segment demonstrated that as few as 96 amino acids were required for active repression by GAL4-WT1 hybrid proteins in NIH3T3 fibroblasts. However, the truncated GAL4-WT1 fusion proteins functioned poorly as repressors in embryonic kidney-derived 293 cells, suggesting cell type-specific requirements for transcriptional repression. Site-directed mutagenesis of the WT1 repression domain revealed that deletion of homopolymeric proline and glycine regions, as well as single amino acid changes, partially inactivated the repression function. Single repressor binding sites placed upstream of the transcription start site conferred WT1-mediated repression to a heterologous promoter, whereas multiple sites resulted in additive (non-synergistic) increases in transcriptional repression. Significant repression of transcription was observed when binding sites were placed 760 base pairs upstream or 1000 base pairs downstream relative to the site of transcription initiation. We conclude that the transcriptional repression function of WT1 is contained in the N-terminal, non-DNA binding domain of the protein and that repression can be functionally transferred to a heterologous DNA binding domain.