Msx1 promoter is known to be repressed by Msx1 protein [Shetty, Takahashi, Matsui, Iyengar and Raghow (1999) Biochem. J. 339, 751-758]. We show that in the transiently transfected C(2)C(12) myoblasts, co-expression of Msx3 also causes potent repression of Msx1 promoter that can be relieved by exogenous expression of cAMP-response-element-binding protein-binding protein (CBP) and p300 in a dose-dependent manner. Co-immunoprecipitation and Western blot analyses revealed that Msx3 interacts with CBP and p300 and this interaction significantly decreases the histone acetyltransferase (HAT) activity of both proteins. We also discovered that Msx3-mediated repression of Msx1 promoter is synergized by the exogenous co-expression of histone deacetylase 1 (HDAC1). Furthermore, the repression of Msx1 promoter by Msx3 could be relieved by treating transfected cells with trichostatin A, an inhibitor of HDAC(s). Finally, we show that Msx3 and HDAC1 can be co-immunoprecipitated in a complex that does not contain CBP and that Msx3 and HDAC1 proteins are co-localized in the nucleus. Taken together, our results strongly suggest that two distinct multiprotein complexes are present within the nuclei of C(2)C(12) cells: one containing Msx3 and HDAC(s) and another containing Msx3 and CBP and/or p300. On the basis of these results, we propose a dual mechanism of repression by Msx3 protein that involves the squelching of the HAT activity of co-activators, CBP and p300, and recruitment of HDAC(s).