Hairy/Enhancer of split 1 (Hes1) is a mammalian transcriptional repressor that plays crucial roles in the regulation of several developmental processes, including neuronal differentiation. The aim of this study was to elucidate the molecular mechanisms that regulate the transcription repression activity of Hes1. It is shown here that Hes1 associates with the nuclear matrix, the ribonucleoprotein network of the nucleus that plays important roles in transcriptional regulation. Nuclear matrix binding is mediated by the same Hes1 C-terminal domain that is also required for transcriptional repression. This domain contains the WRPW motif that acts as a binding site for the transcriptional corepressor Groucho, which also localizes to the nuclear matrix. Both the nuclear matrix association and transcription repression activity of Hes1 are inhibited by deletion of the WRPW motif, indicating that Groucho acts as a transcriptional corepressor for Hes1. This corepressor role is not modulated by the Groucho-related gene product Grg5. In contrast, the Runt-related protein RUNX2, which localizes to the nuclear matrix and interacts with Groucho and Hes1, can inhibit both the Groucho.Hes1 interaction and the transcription repression ability of Hes1. Together, these observations suggest that transcriptional repression by Hes1 requires interactions with Groucho at the nuclear matrix and that RUNX proteins act as negative regulators of the repressive activity of Groucho.Hes1 complexes.