The IE2 gene of human cytomegalovirus has been implicated in the development of coronary restenosis, and the gene product appears to inhibit p53-dependent transactivation. Here we describe an analysis of the IE2-p53 interaction. Repression of p53 function by IE2 requires two separable domains of IE2. The N terminus of IE2 interacts with p53. IE2 has little effect on the ability of p53 to bind specific DNA sequences. Reduction of the transactivation activity of p53 is caused by a transcriptional repression function contributed by the C-terminal domain of IE2. These findings suggest that IE2 may function as a transcriptional repressor, which is recruited to p53's target genes by interacting with p53.