The proto-oncoprotein c-Myc and the multifunctional transcriptional regulator YY1 have been shown previously to interact directly in a manner that excludes Max from the complex (Shrivastava et al., 1993). As binding to Max is necessary for all known c-Myc activities we have analysed the influence of YY1 on c-Myc function. We demonstrate that YY1 is a potent inhibitor of c-Myc transforming activity. The region in YY1 required for inhibition corresponds to a functional DNA-binding domain and is distinct from the domains necessary for direct binding to c-Myc. Furthermore the transactivation domain of YY1 was not necessary suggesting that gene regulation by YY1, for example through DNA bending or displacement of regulators from DNA, could be the cause for the negative regulation of c-Myc. This model of indirect regulation of c-Myc by YY1 was supported by the finding that although YY1 did not bind to the c-Myc transactivation domain (TAD) in vitro it was able to inhibit transactivation by Gal4-MycTAD fusion proteins in transient transfections. As for the inhibition of transformation, an intact DNA-binding domain of YY1 was necessary and sufficient for this effect. In addition YY1 did not alter c-Myc/Max DNA binding, further supporting an indirect mode of action. Our findings point to a role of YY1 as a negative regulator of cell growth with a possible involvement in tumor suppression.