Drosophila Groucho, like its vertebrate Transducin-like Enhancer-of-split homologues, is a corepressor that silences gene expression in numerous developmental settings. Groucho itself does not bind DNA but is recruited to target promoters by associating with a large number of DNA-binding negative transcriptional regulators. These repressors tether Groucho via short conserved polypeptide sequences, of which two have been defined. First, WRPW and related tetrapeptide motifs have been well characterized in several repressors. Second, a motif termed Engrailed homology 1 (eh1) has been found predominantly in homeodomain-containing transcription factors. Here we describe a yeast two-hybrid screen that uncovered physical interactions between Groucho and transcription factors, containing eh1 motifs, with different types of DNA-binding domains. We show that one of these, the zinc finger protein Odd-skipped, requires its eh1-like sequence for repressing specific target genes in segmentation. Comparison between diverse eh1 motifs reveals a bias for the phosphoacceptor amino acids serine and threonine at a fixed position, and a mutational analysis of Oddskipped indicates that these residues are critical for efficient interactions with Groucho and for repression in vivo. Our data suggest that phosphorylation of these phosphomeric residues, if it occurs, will down-regulate Groucho binding and therefore repression, providing a mechanism for posttranslational control of Grouchomediated repression.Negative transcriptional regulation is a strategy that has been commonly selected in evolution for setting up and maintaining gene expression patterns. A striking case in point is the process of segmentation in the early Drosophila embryo. This developmental system is regulated almost exclusively by transcription factors, many of which are repressors that silence the expression of their targets (35; reviewed in reference 57). Mutations in genes encoding these transcriptional repressors lead to the loss of repressor activity that normally restricts the expression domains of downstream genes, causing disruptions in the metameric subdivision of the fly embryo.One key principle to emerge from studies on Drosophila segmentation and on developmental processes in other model organisms is the fact that DNA-binding repressors in general do not operate on their own. Instead, they complex with nuclear coregulators, called corepressors, tethering them to promoters whose expression is subsequently blocked (43). Groucho (Gro), one such ubiquitously expressed corepressor that is highly conserved throughout evolution from worms to humans, has been shown to interact with and to potentiate the repressor function of a vast number of transcription factors, including many of those acting in segmentation (8). It is not fully understood how Gro and its Transducin-like Enhancer-of-split (TLE) mammalian homologues elicit transcriptional repression, although given that these corepressors associate with histones and bind histone deacetylases, they are likely to ...