δEF1, a representative of the zinc finger-homeodomain protein family, is a transcriptional repressor which binds E2-box (CACCTG) and related sequences and counteracts the activators through transrepression mechanisms. It has been shown that the N-proximal region of the protein is involved in the transrepression. Here we demonstrate that δEF1 has a second mechanism of transrepression recruiting CtBP1 or CtBP2 as its corepressor. A two-hybrid screen of mouse cDNAs with various portions of δEF1 identified these proteins, which bind to δEF1 in a manner dependent on the PLDLSL sequence located in the short medial (MS) portion of δEF1. CtBP1 is the mouse orthologue of human CtBP, known as the C-terminal binding protein of adenovirus E1A, while CtBP2 is the second homologue. Fusion of mouse CtBP1 or CtBP2 to Gal4DBD (Gal4 DNA binding domain) made them Gal4 binding site-dependent transcriptional repressors in transfected 10T1/2 cells, indicating their involvement in a transcriptional repression mechanism. When the MS portion of δEF1 was used to Gal4DBD and used to transfect cells, a strong transrepression activity was generated, but this activity was totally dependent on the PLDLSL sequence which served as the site for interaction with endogenous CtBP proteins, indicating that CtBP1 and -2 can act as corepressors. Exogenous CtBP1/2 significantly enhanced transcriptional repression by δEF1, and this enhancement was lost if the PLDLSL sequence was altered, demonstrating that CtBP1 and -2 act as corepressors of δEF1. In the mouse, CtBP1 is expressed from embryo to adult, but CtBP2 is mainly expressed during embryogenesis. In developing embryos, CtBP1 and CtBP2 are expressed broadly with different tissue preferences. Remarkably, their high expression occurs in subsets of δEF1-expressing tissues, e.g., cephalic and dorsal root ganglia, spinal cord, posterior-distal halves of the limb bud mesenchyme, and perichondrium of forming digits, supporting the conclusion that CtBP1 and -2 play crucial roles in the repressor action of δEF1 in these tissues.