TFII-I is an unusual transcription factor possessing both basal and signal-induced transcriptional functions. Here we report the characterization of a TFII-I-related factor (MusTRD1/BEN) that regulates transcriptional functions of TFII-I by controlling its nuclear residency. MusTRD1/BEN has five or six direct repeats, each containing helix--loop--helix motifs, and, thus, belongs to the TFII-I family of transcription factors. TFII-I and MusTRD1/BEN, when expressed individually, show predominant nuclear localization. However, when the two proteins are coexpressed ectopically, MusTRD1/BEN locates almost exclusively to the nucleus, whereas TFII-I is largely excluded from the nucleus, resulting in a loss of TFII-I-dependent transcriptional activation of the c-fos promoter. Mutation of a consensus nuclear localization signal in MusTRD1/BEN results in a reversal of nuclear residency of the two proteins and a concomitant gain of c-fos promoter activity. These data suggest a means of transcriptional repression by competition at the level of nuclear occupancy.