The myeloid transforming gene Evi-1 encodes a protein with two zinc finger domains, designated ZF1 and ZF2, with distinct DNA binding specificities. For the first time we demonstrate that Evi-1 has transcriptional repressor activity which is directly proportional to the amount of Evi-1 protein in cells. Repression has been observed with two distinct promoters: the minimal HSV-1 tk promoter and a VP16 inducible adenovirus E1b minimal promoter. Optimal repression is DNA binding dependent and is mediated by either ZF1 or a heterologous GAL4 DNA binding domain (GAL4DBD) but is significantly less efficient through the ZF2 binding site. Both GAL4DBD/Evi-1 fusion and non-fusion proteins have been used to map the repressor activity to a proline-rich region located within amino acids 514-724 between the ZF1 and ZF2 domains. Constitutive expression of mutant proteins lacking the repressor domain are defective for transformation of Rat1 fibroblasts demonstrating that this region is required for the oncogenic activity of the Evi-1 protein. These studies show that the Evi-1 gene encodes a transcriptional repressor and has important implications for the mechanism of action of the Evi-1 protein both in development and in the progression of some myeloid leukaemias.