Id2 is a natural inhibitor of the basic helix-loop-helix transcription factors and the retinoblastoma tumor suppressor protein. Active Id2 prevents differentiation and promotes cell-cycle progression and tumorigenesis in the nervous system. A key event that regulates Id2 activity during differentiation is translocation from the nucleus to the cytoplasm. Here we show that the actin-associated protein enigma homolog (ENH) is a cytoplasmic retention factor for Id2. ENH contains three LIM domains, which bind to the helixloop-helix domain of Id proteins in vitro and in vivo. ENH is up-regulated during neural differentiation, and its ectopic expression in neuroblastoma cells leads to translocation of Id2 from the nucleus to the cytoplasm, with consequent inactivation of transcriptional and cell-cycle-promoting functions of Id2. Conversely, silencing of ENH by RNA interference prevents cytoplasmic relocation of Id2 in neuroblastoma cells differentiated with retinoic acid. Finally, the differentiated neural crest-derived tumor ganglioneuroblastoma coexpresses Id2 and ENH in the cytoplasm of ganglionic cells. These data indicate that ENH contributes to differentiation of the nervous system through cytoplasmic sequestration of Id2. They also suggest that ENH is a restraining factor of the oncogenic activity of Id proteins in neural tumors.differentiation ͉ enigma homolog ͉ Id proteins ͉ neural cancer I d2 is one of the four members of the Id protein family, a group of proteins known as inhibitor of differentiation (1, 2). Id2 lies at the center of a molecular network including the retinoblastoma (Rb) tumor suppressor protein and the basic helix-loop-helix (bHLH) transcription factors, the best-known targets for inhibition by Id2 (3, 4). These connections probably operate in a variety of cell types, but our work has characterized them in the nervous system (5-7). In this tissue, overexpression of Id proteins inhibits differentiation whereas ablation of Id genes induces premature differentiation of various neural cell types in vitro and in vivo (8-10). As physiologic regulator of Id2, Rb cooperates with bHLH transcription factors to promote cell-cycle arrest and differentiation in the developing brain. This pathway is subverted in tumor cells. Malignant transformation in the central and peripheral nervous system coincides with frequent elevation of Id2, a process typically implemented by the activation of oncoproteins such as Myc and Ews-Fli1 that up-regulate Id2 gene transcription, (6,7,11,12). The aberrant accumulation of Id2 contributes to uncontrolled proliferation and neoangiogenesis, two hallmarks of neural cancer (13).There is general agreement with the notion that differentiation of a variety of cell types requires elimination of Id function. However, the mechanisms by which the signaling pathways initiating differentiation in the nervous system inactivate Id proteins are unknown. Although Id are viewed mainly as nuclear proteins, recent papers reported that relocation of Id proteins to the cytoplasm is an effective...