The receptor tyrosine kinase EPHB2 has recently been identified as a TCF4 transcriptional target that controls the intestinal epithelial architecture through repulsive interactions with Ephrin-B ligands. Many reports have demonstrated that most human colorectal cancers lose EPHB2 expression despite constitutive Wnt activation. Therefore, we investigated the mechanisms that cause EPHB2 down-regulation in colorectal cancer. In this study, we demonstrate that DNA hypermethylation was not responsible for the frequent loss of EPHB2 expression in colorectal cancer. Cloning and functional characterization of the EPHB2 gene 5'-flanking region revealed a potential negative regulatory element in the distal regulatory region. In vitro electrophoretic gel mobility shift and in vivo chromatin immunoprecipitation assays demonstrated that c-Rel directly binds to the putative element. Inhibiting c-Rel activity or knocking down c-Rel expression by RNA interference in colon cancer cells was sufficient to induce EPHB2 expression. Furthermore, transient transfection assays demonstrated that c-Rel over-expression repressed endogenous EPHB2 expression in colon cancer cells. We demonstrate for the first time that c-Rel acts as a transcriptional repressor of EPHB2 and plays an active role in EPHB2 down-regulation in colorectal cancers.