We have previously reported the cloning, sequencing, and partial characterization of Kid-1, a zinc finger-encoding cDNA from the rat kidney. The Kid-1 protein and approximately one-third of all other zinc finger proteins contain a highly conserved region of approximately 75 amino acids at their NH2 terminus named Krüppel-associated box (KRAB), which is subdivided into A and B domains. The evolutionary conservation, wide distribution, and genomic organization of the KRAB domains suggest an important role of this region in the transcriptional regulatory function of zinc finger proteins. The functional significance of the KRAB domain was evaluated by studying transcriptional activities of yeast GAL4-rat Kid-1 fusion proteins containing various regions of the non-zinc-finger domain of Kid-1. Transcriptional repressor activity of GAL4-Kid-1 fusion proteins maps to the KRAB-A domain. The KRAB-A domain of another zinc finger protein, ZNF2, also has repressor activity. Site-directed mutagenesis of conserved amino acids in this motif results in decreased repressor activity. Thus, we have established a functional significance for the KRAB-A domain, a consensus sequence common in zinc finger proteins.