The retinoblastoma susceptibility gene product pRb restricts cellular proliferation by affecting gene expression by all three classes of nuclear RNA polymerases. To elucidate the molecular mechanisms underlying pRb-mediated repression of ribosomal DNA (rDNA) transcription by RNA polymerase I, we have analyzed the effect of pRb in a reconstituted transcription system. We demonstrate that pRb, but not the related protein p107, acts as a transcriptional repressor by interfering with the assembly of transcription initiation complexes. The HMG box-containing transcription factor UBF is the main target for pRb-induced transcriptional repression. UBF and pRb form in vitro complexes involving the C-terminal part of pRb and HMG boxes 1 and 2 of UBF. We show that the interactions between UBF and TIF-IB and between UBF and RNA polymerase I, respectively, are not perturbed by pRb. However, the DNA binding activity of UBF to both synthetic cruciform DNA and the rDNA promoter is severely impaired in the presence of pRb. These studies reveal another mechanism by which pRb suppresses cell proliferation, namely, by direct inhibition of cellular rRNA synthesis.