In response to agouti signal protein, melanocytes switch from producing eumelanin to pheomelanin concomitant with the down-regulation of melanogenic gene transcription. We previously reported that a ubiquitous basic helix-loop-helix transcription factor, known as ITF2, is up-regulated during this switch, and we now report that treatment of melanocytes with melanocyte-stimulating hormone down-regulates expression of ITF2. To more fully characterize the involvement of ITF2 in regulating melanogenic gene transcription, ITF2 sense or antisense constructs were introduced into melan-a melanocytes. Gene and protein expression analyses and luciferase reporter assays using promoters from melanogenic genes showed that up-regulation of ITF2 suppressed melanogenic gene expression as well as the expression of Mitf, a melanocyte-specific transcription factor. In addition, stable ITF2 sense transfectants had significant reductions in pigmentation and a less dendritic phenotype compared with mock transfectants. In contrast, ITF2 antisense-transfected melanocytes were more pigmented and more dendritic. These results demonstrate that up-regulation of ITF2 during the pheomelanin switch is functionally significant and reveal that differential expression of a ubiquitous basic helix-loop-helix transcription factor can modulate expression of melanogenic genes and the differentiation of melanocytes.