Mad proteins are basic-helix-loop-helix-leucine zipper (bHLH-ZIP)-containing members of the myc oncoprotein network. They interact with the bHLH-ZIP protein max, compete for the same DNA binding sites as myc-max heterodimers and down-regulate myc-responsive genes. Using the bHLH-ZIP domain of mad1 as a yeast two-hybrid 'bait', we identified Mmip-2, a novel RING finger protein that interacts with all mad members, but weakly or not at all with c-myc, max or unrelated bHLH or bZIP proteins. The mad1-Mmip-2 interaction is mediated by the ZIP domain in the former protein and by at least two regions in the latter which do not include the RING finger. Mmip-2 can disrupt max-mad DNA binding and can reverse the suppressive effects of mad proteins on c-myc-responsive target genes and on c-myc + ras-mediated focus formation in fibroblasts. Tagging with spectral variants of green fluorescent protein showed that Mmip-2 and mad proteins reside in separate cytoplasmic and nuclear compartments, respectively. When co-expressed, however, the proteins interact and translocate to the cellular compartment occupied by the more abundant protein. These observations suggest a novel way by which Mmip-2 can modulate the transcriptional activity of myc oncoproteins.