Host cell factor 1 (HCF-1) is a cellular transcriptional coactivator which coordinates the assembly of enhancer complex through direct interactions with viral and cellular trans-activators such as VP16, Oct-1, LZIP, and GA-binding protein. These interactions are mediated by the beta-propeller domain comprising the first 380 residues of HCF-1 with six kelch repeats. Here we describe the identification and characterization of a novel HCF-like kelch repeat protein, designated HCLP-1. HCLP-1 is a ubiquitously expressed nuclear protein which is composed almost entirely of a six-bladed beta-propeller. HCLP-1 selectively interacts with LZIP but not with VP16. The physical interaction between HCLP-1 and LZIP leads to the repression of the LZIP-dependent transcription. The HCLP-1-binding domain of LZIP maps to residues 109-315, which contain the bZIP DNA-binding motif. Electrophoretic mobility shift assay demonstrates that HCLP-1 indeed interferes with the binding of LZIP to its DNA target. Thus, HCLP-1 serves a transcriptional co-repressor function mediated through its inhibitory interaction with the LZIP transcription factor. Our findings suggest a new mechanism for transcriptional regulation by HCF-like proteins.