Sox10 is a member of the group E Sox transcription factor family and plays key roles in neural crest development and subsequent cellular differentiation. Sox10 binds to regulatory sequences in target genes via its conserved high mobility group domain. In most cases, Sox10 exerts its transcriptional effects in concert with other DNA-binding factors, adaptor proteins, and nuclear import proteins. These interactions can lead to synergistic gene activation and can be cell type-specific. In earlier work, we demonstrated that Sox10 transactivates the nicotinic acetylcholine receptor alpha3 and beta4 subunit genes and does so only in neuronal-like cell lines, raising the possibility that Sox10 mediates its effects via interactions with co-regulatory factors. Here we describe the identification of the armadillo repeat-containing protein, ARMCX3, as a Sox10-interacting protein. Biochemical analyses indicate that ARMCX3 is an integral membrane protein of the mitochondrial outer membrane. Others have shown that Sox10 is a nucleocytoplasmic shuttling protein. We extend this observation and demonstrate that, in the cytoplasm, Sox10 is peripherally associated with the mitochondrial outer membrane. Both Sox10 and ARMCX3 are expressed in mouse brain and spinal cord as well as several cell lines. Overexpression of ARMCX3 increased the amount of mitochondrially associated Sox10. In addition, although ARMCX3 does not possess intrinsic transcriptional activity, it does enhance transactivation of the nicotinic acetylcholine receptor alpha3 and beta4 subunit gene promoters by Sox10. These results suggest that Sox10 is a membrane-associated factor whose transcriptional function is increased by direct interactions with ARMCX3 and raise the possibility of a signal transduction cascade between the nucleus and mitochondria through Sox10/ARMCX3 interactions.