Engrailed (En) is a homeodomain protein that binds to a consensus sequence (NP) and plays an important role during Drosophila development. Purified En, which is produced in Escherichia coli, binds not only to this consensus sequence but also to the TATA box of the Drosophila Hsp70 promoter and of other eukaryotic promoters. Interestingly, En represses transcription of these promoters in an in vitro-reconstituted mammalian transcription system and footprint analyses show that En competes with the TATA box-binding protein transcription factor IID for binding to the TATA box. In contrast, a stable template-committed complex formed by preincubation of transcription factor IID with the promoter is not disrupted by addition of En, and in this case transcription is not repressed. These in vitro studies suggest a transcriptional repression mechanism, involving competition between En and transcription factor IID for TATA box binding, that may be involved in En-mediated repression in vivo.