Fanconi anemia (FA) is an autosomal recessive cancer susceptibility syndrome. The phenotype includes developmental defects, bone marrow failure, and cell cycle abnormalities. At least eight complementation groups (A-H) exist, and although three of the corresponding complementation group genes have been cloned, they lack recognizable motifs, and their functions are unknown. We have isolated a binding partner for the Fanconi anemia group C protein (FANCC) by yeast two-hybrid screening. We show that the novel gene, FAZF, encodes a 486 amino acid protein containing a conserved amino terminal BTB/POZ protein interaction domain and three C-terminal Krüppel-like zinc fingers. FAZF is homologous to the promyelocytic leukemia zinc finger (PLZF) protein, which has been shown to act as a transcriptional repressor by recruitment of nuclear corepressors (N-CoR, Sin3, and HDAC1 complex). Consistent with a role in FA, BTB/POZ-containing proteins have been implicated in oncogenesis, limb morphogenesis, hematopoiesis, and proliferation. We show that FAZF is a transcriptional repressor that is able to bind to the same DNA target sequences as PLZF. Our data suggest that the FAZF/FANCC interaction maps to a region of FANCC deleted in FA patients with a severe disease phenotype. We also show that FAZF and wild-type FANCC can colocalize in nuclear foci, whereas a patient-derived mutant FANCC that is compromised for nuclear localization cannot. These results suggest that the function of FANCC may be linked to a transcriptional repression pathway involved in chromatin remodeling.