Schwann cell factor 1 (SC1), a p75 neurotrophin receptor–interacting protein, is a member of the positive regulatory/suppressor of variegation, enhancer of zeste, trithorax (PR/SET) domain-containing zinc finger protein family, and it has been shown to be regulated by serum and neurotrophins. SC1 shows a differential cytoplasmic and nuclear distribution, and its presence in the nucleus correlates strongly with the absence of bromodeoxyuridine (BrdU) in these nuclei. Here, we investigated potential transcriptional activities of SC1 and analyzed the function of its various domains. We show that SC1 acts as a transcriptional repressor when it is tethered to Gal4 DNA-binding domain. The repressive activity requires a trichostatin A–sensitive histone deacetylase (HDAC) activity, and SC1 is found in a complex with HDACs 1, 2, and 3. Transcriptional repression exerted by SC1 requires the presence of its zinc finger domains and the PR domain. Additionally, these two domains are involved in the efficient block of BrdU incorporation by SC1. The zinc finger domains are also necessary to direct SC1's nuclear localization. Lastly, SC1 represses the promoter of a promitotic gene, cyclin E, suggesting a mechanism for how growth arrest is regulated by SC1.