PELP1 (proline-, glutamic acid-, and leucine-rich protein 1) has been recognized as a coactivator of estrogen receptor (ER)-recruiting p300/CREB-binding protein histone acetyltransferase to the target chromosome. The present study shows that PELP1 does indeed coactivate ER-mediated transcription but also serves as a corepressor of other nuclear hormone receptors (NR)-and non-NR sequence-specific transcription factors tested, including GR, Nur77, AP1, NF-B, and TCF/SRF. PELP1 expression also retarded the proliferation of mouse fibroblast cell lines in which there was no detectable ER. This was due, at least in part, to the suppressed activation of serum-response genes such as c-fos that in turn resulted from the blocked histone hyperacetylation of nucleosomes containing the c-fos promoter region. The N-terminal leucine-abundant region of PELP1 was observed to interact with HDAC2 and exhibited repressive activity when tethered to the chromatin. In addition, the C-terminal glutamic acid-abundant region bound to the hypoacetylated histones H3 and H4 and prevented them from becoming substrates of histone acetyltransferase. Thus PELP1 promotes and maintains the hypoacetylated state of histones at the target genomic site, and ER binding reverses its role to hyperacetylate histones through an as yet unidentified mechanism.