A cellular DNA binding protein, LBP-1, sequentially interacts in a concentration-dependent manner with two sites that surround the transcriptional initiation site of the human immunodeficiency virus type 1 (HIV-1) promoter. Although sequences in the downstream site (site I) were found to enhance transcription, purified LBP-1 specifically repressed transcription in vitro by binding to the upstream site (site II), which overlaps the TATA element. The binding of human TATA binding factor (TFIID) to the promoter before LBP-1 blocked repression, suggesting that repression resulted from an inhibition of TFIID binding to the TATA element. Furthermore, mutations that eliminated binding to site II both prevented repression in vitro and increased HIV-1 transcription in stably transformed cells. These findings suggest that a cellular factor regulates HIV-1 transcription in a manner that is characteristic of bacterial repressors and that this factor could be important in HIV-1 latency.