The HEXIM1 protein has been shown to form a protein-RNA complex composed of 7SK small nuclear RNA and positive transcription elongation factor b (P-TEFb), which is composed of cyclindependent kinase 9 (CDK9) and cyclin T1, and to inhibit the kinase activity of CDK9, thereby suppressing RNA polymerase II-dependent transcriptional elongation. Here, we biochemically demonstrate that HEXIM1 forms a distinct complex with glucocorticoid receptor (GR) without RNA, CDK9, or cyclin T1. HEXIM1, through its arginine-rich nuclear localization signal, directly associates with the ligand-binding domain of GR. Introduction of HEXIM1 short interfering RNA and adenovirus-mediated exogenous expression of HEXIM1 positively and negatively modulated glucocorticoidresponsive gene activation, respectively. In the nucleus, HEXIM1 was shown to localize in a distinct compartment from that of the p160 coactivator transcriptional intermediary factor 2. Overexpression of HEXIM1 decreased ligand-dependent association between GR and transcriptional intermediary factor 2. Antisense-mediated disruption of 7SK blunted the negative effect of HEXIM1 on arylhydrocarbon receptor-dependent transcription but not on GRmediated one, indicating that a class of transcription factors are direct targets of HEXIM1. These results indicate that HEXIM1 has dual roles in transcriptional regulation: inhibition of transcriptional elongation dependent on 7SK RNA and positive transcription elongation factor b and interference with the sequence-specific transcription factor GR via a direct protein-protein interaction. Moreover, the fact that the central nuclear localization signal of HEXIM1 is essential for both of these actions may argue the crosstalk of these functions.nuclear receptor ͉ RNA-binding protein ͉ ribonucleoprotein ͉ steroid ͉ nuclear localization signal T ranscription is a complex multistep process that relies on highly coordinated actions of a number of cis-and transacting elements (1-3). RNA polymerase II (RNAP II), as the central player in transcription of class II genes, carries out a series of events that include promoter binding, transcription initiation, promoter escape, transcription elongation, and transcription termination. During transcription by RNAP II, phosphorylation of the C-terminal domain of the largest subunit of RNAP II by positive transcription elongation factor b (P-TEFb), which is composed of cyclin-dependent kinase 9 (CDK9) and cyclin T1, is crucial for the transition from the abortive to the productive phase of transcriptional elongation, leading to the generation of full-length RNA transcripts. P-TEFb has been shown to lose its ability to phosphorylate the C-terminal domain when associated with 7SK RNA, a 330-nt small nuclear RNA (4-6).HEXIM1 was first identified as a protein whose expression is induced in vascular smooth muscle cells (VSMC) in response to hexamethylene bisacetamide (HMBA) treatment (7, 8). The HEXIM1 protein consists of 359 amino acids and is tentatively divided into three regions: an N-terminal proline-rich ...