Transcriptional repression through chromatin remodeling and histone deacetylation has been postulated as a driving force for tumorigenesis. We isolated and characterized a novel POZ domain Krüppel-like zinc finger transcription repressor, ZBTB5 (zinc finger and BTB domain-containing 5). Serial analysis of gene expression (SAGE) analysis showed that ZBTB5 expression is higher in retinoblastoma and muscle cancer tissues. Immunocytochemistry showed that ZBTB5 was localized to the nucleus, particularly nuclear speckles. ZBTB5 directly repressed transcription of cell cycle arrest gene p21 by binding to the proximal GC-box 5/6 elements and the two distal p53-responsive elements (bp -2323 approximately -2299; bp -1416 approximately -1392). Chromatin immunoprecipitation assays showed that ZBTB5 and p53 competed with each other in occupying the p53 binding elements. ZBTB5 interacted with co-repressor-histone deacetylase complexes such as BCoR (BCL-6-interacting corepressor), NCoR (nuclear receptor corepressor), and SMRT (silencing mediator for retinoid and thyroid receptors) via its POZ domain. These interactions resulted in deacetylation of histones Ac-H3 and Ac-H4 at the proximal promoter, which is important in the transcriptional repression of p21. MTT (3-(4,5-di meth yl thi azol-2-yl)-2,5-diphenyltetrazolium bromide) assays and fluorescent-activated cell sorter analysis revealed that ZBTB5 stimulated both cell proliferation and cell cycle progression, significantly increasing the number of cells in S-phase. Overall, our data suggest that ZBTB5 is a potent transcription repressor of cell cycle arrest gene p21 and a potential proto-oncogene stimulating cell proliferation.