TEL (Translocation-ETS-Leukemia or ETV 6) is disrupted by multiple chromosomal translocations in acute leukemia. The loss of heterozygosity at the TEL locus in leukemias and the hemizygous deletion of TEL that is observed in various tumors, suggests that TEL is a tumor suppressor. Overexpression of TEL alters cellular morphology and represses the expression of the matrix metalloproteinase stromelysin-1. Based on these studies, deletion analysis was used to define the minimal repression domains of TEL. TEL-mediated repression required both the N-terminal pointed domain and a central region composed of amino acids 268-303. The mSin3A and N-CoR corepressors bind to the pointed domain and the central repression domain of TEL, respectively. Unexpectedly, histone deacetylase-3, but not other histone deacetylases, also associates with the central region of TEL. Histone deacetylase-3 interacts with a TEL mutant that cannot bind N-CoR, suggesting that this is a direct interaction with TEL. In addition, histone H3 was under-acetylated near the TEL-binding sites in the endogenous stromelysin-1 promoter when TEL was expressed. Furthermore, trichostatin A, a potent histone deacetylase inhibitor, impaired TEL-dependent repression of the stromelysin-1 promoter. Finally, while TEL-expression induced cellular aggregation of Ras-transformed cells, Trichostatin A reversed the TEL-induced cellular aggregation phenotype. Thus, the cumulative data suggests that histone deacetylase-3 activity is required for the transcriptional functions of TEL.