The members of the AP-2 family of transcription factors are developmentally regulated and have distinct yet overlapping functions in the regulation of many genes governing growth and differentiation. All AP-2 factors appear to be capable of binding very similar DNA recognition sites, and the determinants of functional specificity remain to be elucidated. AP-2 transcription factors have been shown to act both as transcriptional activators and repressors in a promoter-specific manner. Although several mediators of their activation function have been suggested, few mechanisms for the repression or down-regulation of transactivation have been described. In a two-hybrid screen for proteins interacting with AP-2 factors, we have identified the UBC9 gene that encodes the E2 (ubiquitin carrier protein)-conjugating enzyme for the small ubiquitin-like modifier, SUMO. The interaction domain resides in the C-terminal half of AP-2, which contains the conserved DNA binding and dimerization domains. We have detected sumolated forms of endogenous AP-2 in mammalian cells and have further mapped the in vivo sumolation site to conserved lysine 10. Transient transfection studies indicate that sumolation of AP-2 decreases its transcription activation potential, and we discuss the possible mechanisms for the observed suppression of AP-2 transactivation.