An inverted CCAAT sequence is recognized by both transcription factors NF-Y and DNA/RNA binding protein YB-1. In the process of examining the effect of nuclear RNA on an inverted CCAAT-containing promoter of MDR1 gene, we found that U7 snRNA inhibits NF-Y and suppresses the promoter activity both in vitro and in NG108-15 tumor cells. Analysis using a designed RNA, which was structurally unrelated to U7 snRNA, revealed that RNA binding by YB-1 is not specific and that the protein is not involved in the transcription. Furthermore, we demonstrated that in the nucleus of doxorubicin-treated cells, DNA binding by NF-Y and transcriptional activity of the promoter were inhibited without either a decrease of NF-Y or an increase of the p53 tumor suppressor, which is known to inhibit DNA binding by NF-Y. In these cells, U7 snRNA was specifically increased and associated with NF-Y, and treatment with RNase A eliminated the inhibition of NF-Y activity. These results suggest that U7 snRNA has a novel function as a transcriptional regulator to control NF-Y.