Large T-antigen, the major regulatory protein encoded by polyomaviruses, including Simian Virus 40 (SV40) and JC virus (JCV), is a multifunctional phosphoprotein that is involved in many viral and cellular events. In addition to its integral role in viral replication and cellular transformation, T-antigen also regulates transcription of both viral and cellular genes. In particular, the viral late promoter has been used as a model for the analysis of T-antigen-mediated transcriptional activation. Earlier studies have demonstrated that the cellular protein Puralpha is able to attenuate the transcriptional activity of JCV T-antigen. We investigated the mechanism whereby Puralpha affects T-antigen function. Co-immunoprecipitation studies demonstrated that Puralpha and JCV T-antigen associate in vivo, and glutathione S-transferase affinity binding assays revealed that these two proteins interact in vitro. Moreover, we localized the sequences of Puralpha that are important for the interaction between Puralpha and JCV T-antigen. In addition, we demonstrated that Puralpha interacts with the SV40 T-antigen. Transient transfection studies demonstrated that Puralpha and JCV T-antigen interact functionally as well. More specifically, Puralpha and a deletion mutant that interacts with T-antigen attenuated T-antigen-mediated transcriptional activation. A Puralpha deletion mutant that is unable to interact with JCV T-antigen, however, was found to be incapable of abrogating JCV T-antigen transactivation. Taken together, these data demonstrate that Puralpha and T-antigen interact both physically and functionally and that this interaction modulates T-antigen-mediated transcriptional activation. The implication of these findings with respect to the cellular role of Puralpha is discussed.