The ETO protein was originally identified by its fusion to the AML-1 transcription factor in translocation (8;21) associated with the M2 form of acute myeloid leukemia (AML). The resulting AML-1-ETO fusion is an aberrant transcriptional regulator due to the ability of ETO, which does not bind DNA itself, to recruit the transcriptional corepressors N-CoR, SMRT, and Sin3A and histone deacetylases. The promyelocytic leukemia zinc finger (PLZF) protein is a sequence-specific DNA-binding transcriptional factor fused to retinoic acid receptor alpha in acute promyelocytic leukemia associated with the (11;17)(q23;q21) translocation. PLZF also mediates transcriptional repression through the actions of corepressors and histone deacetylases. We found that ETO is one of the corepressors recruited by PLZF. The PLZF and ETO proteins associate in vivo and in vitro, and ETO can potentiate transcriptional repression by PLZF. The N-terminal portion of ETO forms complexes with PLZF, while the C-terminal region, which was shown to bind to N-CoR and SMRT, is required for the ability of ETO to augment transcriptional repression by PLZF. The second repression domain (RD2) of PLZF, not the POZ/BTB domain, is necessary to bind to ETO. Corepression by ETO was completely abrogated by histone deacetylase inhibitors. This identifies ETO as a cofactor for a sequence-specific transcription factor and indicates that, like other corepressors, it functions through the action of histone deactylase.