Transcription factors mediate their regulatory effects through interaction with DNA and numerous nuclear proteins. The fetal Alz-50 clone 1 (FAC1) protein, a novel DNA-binding protein with the capacity to repress transcription, is likely to function through a similar mechanism (1). Using the two-hybrid yeast screen, we have shown that FAC1 interacts with the myc-associated zinc finger protein (ZF87/MAZ). This association was confirmed in vitro with recombinant protein. The ZF87/MAZ interaction domain was mapped to the region containing a putative nuclear localization signal (NLS) and nuclear export sequence (NES) of FAC1, using deletion mutants of the FAC1 protein. FAC1, on the other hand, recognizes a conformational interface that includes the proline/alanine-rich domain of ZF87/MAZ and the first zinc finger. Cotransfection of NIH3T3 cells with ZF87/MAZ and a luciferase reporter containing the SV40 promoter and enhancer results in an increase in transcriptional activation, suggesting ZF87/MAZ is able to recognize its consensus binding site present in the SV40 promoter. Cotransfection with FAC1 reduces the level of ZF87/MAZ-induced activation of the SV40 promoter in a dose dependent manner. A mutant FAC1, lacking the ZF87/MAZ interaction domain, does not alter ZF87/MAZ activation of the SV40 promoter. These data demonstrate that interaction between FAC1 and ZF87/MAZ alters the transactivation capacity of ZF87/MAZ. By immunoblot analysis, FAC1 and ZF87/MAZ exhibit similar tissue distribution and co-localize to pathologic structures in Alzheimer's disease brain. Coexpression of FAC1 and ZF87/MAZ suggest that interaction of these two proteins will have biological implications for gene regulation in neurodegeneration.