Using transient transfection assays, regulation properties of varicella-zoster virus (VZV)-encoded IE63 protein were analyzed on several VZV immediate early (ORF4), early (ORF28) and late (ORF67) promoters. IE63 was shown to repress the basal activity of most of the promoters tested in epithelial (Vero) and neuronal (ND7) cells to various extents. Trans-repressing activities were also observed on heterologous viral and cellular promoters. Since a construct carrying only a TATA box sequence and a series of wild-type or mutated interleukin (IL)-8 promoters was also repressed by IE63, the role of upstream regulatory elements was ruled out. Importantly, the basal activity of a TATA-less promoter was not affected by IE63. Using a series of IE63 deletion constructs, amino acids 151-213 were shown to be essential to the trans-repressing activity in Vero cells, while in ND7 cells the essential region extended to a much larger carboxy-terminal part of the protein. We also demonstrate that IE63 is capable of disrupting the transcriptional pre-initiation complex and of interacting with several general transcription factors. The central and carboxy-terminal domains of IE63 are important for these effects. Altogether, these results demonstrate that IE63 protein is a transcriptional repressor whose activity is directed towards general transcription factors.