The Ikaros gene family encodes zinc finger DNA-binding proteins essential for lineage determination and control of proliferation in the lymphoid system. Here, we report that, in the nucleus of a T cell, a major fraction of Ikaros and Aiolos proteins associate with the DNA-dependent ATPase Mi-2 and histone deacetylases, in a 2 MD complex. This Ikaros-NURD complex is active in chromatin remodeling and histone deacetylation. Upon T cell activation, Ikaros recruits Mi-2/HDAC to regions of heterochromatin. These studies reveal that Ikaros proteins are capable of targeting chromatin remodeling and deacetylation complexes in vivo. We propose that the restructuring of chromatin is a key aspect of Ikaros function in lymphocyte differentiation.