The transcription factor thyroid transcription factor-1 (TTF-1) is a homeodomain-containing protein that belongs to the NK2 family of genes involved in organogenesis. TTF-1 is required for normal development of the forebrain, lung, and thyroid. In a search for factors that regulate TTF-1 transcriptional activity, we isolated three genes (T:G mismatch-specific thymine DNA glycosylase (TDG), homeodomain-interacting protein kinase 2 (HIPK2), and Ajuba), whose products can interact with TTF-1 in yeast and in mammalian cells. TDG is an enzyme involved in base excision repair. In the present paper, we show that TDG acts as a strong repressor of TTF-1 transcriptional activity in a dose-dependent manner, while HIPK2 and Ajuba display no effect on TTF-1 activity, at least under the tested conditions. TDG-mediated inhibition occurs specifically on TTF-1-responsive promoters in thyroid and non thyroid cells. TDG associates with TTF-1 in mammalian cells through the TTF-1 carboxyl-terminal activation domain and is independent of the homeodomain. These findings reveal a previously unsuspected role for the repair enzyme TDG as a transcriptional repressor and open new routes toward the understanding of the regulation of TTF-1 transcriptional activity.