CCAAT/enhancer-binding protein-beta (C/EBP beta) activator isoforms, C/EBP beta-1 and C/EBP beta-2, differ by only 23 amino acids in the human; however, evidence is accumulating that these transcription factors are functionally distinct. Here we demonstrate that C/EBP beta-1, but not C/EBP beta-2, is conjugated to the small ubiquitin-like modifier (SUMO) family members, SUMO-2 and SUMO-3 despite the fact that the SUMO target consensus is present in both isoforms of this transcription factor. This conjugation is dependent on the integrity of the extreme N terminus of C/EBP beta-1 and requires lysine 173 in the human protein. Furthermore, mutation of this lysine relieves the repression of the cyclin D1 promoter by C/EBP beta-1 without altering the subnuclear localization of C/EBP beta-1. The sumoylation of C/EBP beta-1 is likely to be important in the functional differences observed between C/EBP beta-1 and C/EBP beta-2.