The co-repressor proteins SMRT and NCoR concentrate in specific subnuclear compartments and function with DNAbinding factors to inhibit transcription. To provide detailed mechanistic understanding of these activities, this study tested the hypothesis that functional interactions with transcription factors, such as the pituitary-gland-specific Pit-1 homeodomain protein, direct the subnuclear organization and activity of co-repressor complexes. Both SMRT and NCoR repressed Pit-1-dependent transcription, and NCoR was co-immunoprecipitated with Pit-1. Immunofluorescence experiments confirmed that endogenous NCoR is concentrated in small focal bodies and that incremental increases in fluorescent-protein-tagged NCoR expression lead to progressive increases in the size of these structures. In pituitary cells, the endogenous NCoR localized with endogenous Pit-1 and the co-expression of a fluorescent-protein-labeled Pit-1 redistributed both NCoR and SMRT into diffuse nucleoplasmic compartments that also contained histone deacetylase and chromatin. Automated image-analysis methods were applied to cell populations to characterize the reorganization of corepressor proteins by Pit-1 and mutation analysis showed that Pit-1 DNA-binding activity was necessary for the reorganization of co-repressor proteins. These data support the hypothesis that spherical foci serve as co-repressor storage compartments, whereas Pit-1/co-repressor complexes interact with target genes in more widely dispersed subnuclear domains. The redistribution of corepressor complexes by Pit-1 might represent an important mechanism by which transcription factors direct changes in cell-specific gene expression.