pRB activates transcription by a poorly understood mechanism that involves
relieving negative regulation of the promoter specificity factor Sp1. We sh
ow here that MDM2 inhibits Sp1-mediated transcription, that MDM2 binds dire
ctly to Sp1 in vitro as well as in vivo, and that MDM2 inhibits the DNA-bin
ding activity of Sp1. Forced expression of pRB relieves MDM2-mediated repre
ssion, and interaction of pRB with the MDM2-Sp1 complex releases Sp1 and re
stores DNA binding. These results suggest a model in which the opposing act
ivities of MDM2 and pRB regulate Sp1 DNA-binding and transcriptional activi
ty.