A transcription corepressor, MAT1-mediated transcriptional repressor (MMTR), was found in mouse embryonic stem cell lines. MMTR orthologs (DMAP1) are found in a wide variety of life forms from yeasts to humans. MMTR down-regulation in differentiating mouse embryonic stem cells in vitro resulted in activation of many unrelated genes, suggesting its role as a general transcriptional repressor. In luciferase reporter assays, the transcriptional repression activity resided at amino acids 221 to 468. Histone deacetylase 1 (HDAC1) interacts with MMTR both in vitro and in vivo and also interacts with MMTR in the nucleus. Interestingly, MMTR activity was only partially rescued by competition with dominant-negative HDAC1(H141A) or by treatment with an HDAC inhibitor, trichostatin A (TSA). To identify the protein responsible for HDAC1-independent MMTR activity, we performed a yeast two-hybrid screen with the full-length MMTR coding sequence as bait and found MAT1. MAT1 is an assembly/targeting factor for cyclin-dependent kinase-activating kinase which constitutes a subcomplex of TFIIH. The coiled-coil domain in the middle of MAT1 was confirmed to interact with the C-terminal half of MMTR, and the MMTR-mediated transcriptional repression activity was completely restored by MAT1 in the presence of TSA. Moreover, intact MMTR was required to inhibit phosphorylation of the C-terminal domain in the RNA polymerase II largest subunit by TFIIH kinase in vitro. Taken together, these data strongly suggest that MMTR is part of the basic cellular machinery for a wide range of transcriptional regulation via interaction with TFIIH and HDAC.