Various TATA-binding protein (TBP)-associated proteins are involved in the regulation of gene expression through control of basal transcription directed by RNA polymerase (Pol) II. We recently identified a novel nuclear protein, activator of basal transcription 1 (ABT1), which binds TBP and DNA, and enhances Pol II-directed basal transcription. To better understand regulatory mechanisms for ABT1, we searched for ABT1-binding proteins using a yeast two-hybrid screening and isolated a cDNA clone encoding a novel protein termed ABT1-associated protein (ABTAP). ABTAP formed a complex with ABT1 and suppressed the ABT1-induced activation of Pol II-directed transcription in mammalian cells. Furthermore, ABTAP directly bound to ABT1, disrupted the interaction between ABT1 and TBP, and suppressed the ABT1-induced activation of Pol II-directed basal transcription in vitro. These two proteins colocalized in the nucleolus and nucleoplasm and were concomitantly relocalized into discrete nuclear bodies at higher expression of ABTAP. Taken together, these results suggest that ABTAP binds and negatively regulates ABT1. The ABT1/ABTAP complex is evolutionarily conserved and may constitute a novel regulatory system for basal transcription.