We study two-dimensional WZW models with target space a nonreductive L
ie group. Such models exist whenever the Lie group possesses a bi-inva
riant metric. We show that such WZW models provide a lagrangian descri
ption of the nonreductive (affine) Sugawara construction. We investiga
te the gauged WZW models and we prove that gauging a diagonal subgroup
results in a conformal field theory which can be identified with a co
set construction. A large class of exact four-dimensional string backg
rounds arise in this fashion. We then study the topological conformal
field theory resulting from the G/G coset. We identify the Kazama alge
bra extending the BRST algebra, and the BV algebra structure in BRST c
ohomology which it induces.