NFκB and ZAS3 are transcription factors that control important cellular processes including immunity, cell survival and apoptosis. Although both proteins bind the κB-motif, they produce opposite physiological consequences; NFκB activates transcription, promotes cell growth and is often found to be constitutively expressed in cancer cells, while ZAS3 generally represses transcription, inhibits cell proliferation and is downregulated in some cancers. Here, we show that ZAS3 inhibits NFκB-dependent transcription by competing with NFκB for the κB-motif. Transient transfection studies show that N-terminal 645 amino acids is sufficient to repress transcription activated by NFκB, and that the identical region also possesses intrinsic repression activity to inhibit basal transcription from a promoter. Finally, in vitro DNA-protein interaction analysis shows that ZAS3 is able to displace NFκB by competing with NFκB for the κB-motif. It is conceivable that ZAS3 has therapeutic potential for controlling aberrant activation of NFκB in various diseases.