Groucho is a Drosophila transcriptional repressor involved in neurogenesis, segmentation, and sex determination together with basic helix-loop-helix proteins of the Hairy/Enhancer of split (HES) family. Several mammalian Groucho homologues, the Transducin-like Enhancer of split (TLE) 1 through 4 proteins, share similar properties with their Drosophila counterpart, suggesting that TLE proteins perform functions analogous to the roles of Groucho in Drosophila. The aim of this study was to examine this possibility by characterizing the properties of TLE2 and extending the analysis of TLE1. It is shown here that TLE2 and TLE1 are transcriptional repressors that contain two separate repression domains, located either within a Gln-rich amino terminal region or within an internal domain characterized by an abundance of Ser, Thr, and Pro residues. In addition, both TLE2 and TLE1 can homo- and heterodimerize through a short region that is part of their amino-terminal transcription repression domains. Finally, TLE2 interacts and is co-expressed with mammalian HES proteins in both neural and non-neural tissues. Taken together, these findings implicate TLE2 in transcriptional repression and define the structural elements that mediate transcriptional and protein-protein interaction functions of Groucho/TLE proteins.