CP2-related proteins comprise a family of DNA-binding transcription factors that are generally activators of transcription and expressed ubiquitously. We reported a differential display polymerase chain reaction fragment, Psc2, which was expressed in a regulated fashion in mouse pluripotent cells in vitro and in vivo. Here, we report further characterization of the Psc2 cDNA and function. The Psc2 cDNA contained an open reading frame homologous to CP2 family proteins. Regions implicated in DNA binding and oligomeric complex formation, but not transcription activation, were conserved. Psc2 expression in vivo during embryogenesis and in the adult mouse demonstrated tight spatial and temporal regulation, with the highest levels of expression in the epithelial lining of distal convoluted tubules in embryonic and adult kidneys. Functional analysis demonstrated that PSC2 repressed transcription 2.5-15-fold when bound to a heterologous promoter in ES, 293T, and COS-1 cells. The N-terminal 52 amino acids of PSC2 were shown to be necessary and sufficient for this activity and did not share obvious homology with reported repressor motifs. These results represent the first report of a CP2 family member that is expressed in a developmentally regulated fashion in vivo and that acts as a direct repressor of transcription. Accordingly, the protein has been named CP2-Related Transcriptional Repressor-1 (CRTR-1).