Transcriptional corepressors of the Groucho/transducin-like Enhancer of split (Gro/TLE) family are involved in a variety of cell differentiation mechanisms in both invertebrates and vertebrates. They become recruited to specific promoter regions by forming complexes with a number of different DNA-binding proteins thereby contributing to the regulation of multiple genes. To understand how the functions of Gro/TLE proteins are regulated, it was asked whether their ability to mediate transcriptional repression might be controlled by cell cycle-dependent phosphorylation events. It is shown here that activation of p34(cdc2) kinase (cdc2) with okadaic acid is correlated with hyperphosphorylation of Gro/TLEs. Moreover, pharmacological inhibition of cdc2 activity results in Gro/TLE dephosphorylation. In agreement with these findings, a purified cdc2-cyclin B complex can directly phosphorylate Gro/TLEs in vitro. Two separate Gro/TLE domains, the CcN and SP regions, contain sequences that are phosphorylated by cdc2. Deletion of these sequences is correlated with loss of Gro/TLE phosphorylation by cdc2 in vitro and okadaic acid-induced Gro/TLE hyperphosphorylation in vivo. In addition, Gro/TLEs are phosphorylated during the G(2)/M phase of the cell cycle, and this is correlated with a decreased nuclear interaction. Finally, the transcription repression ability of Gro/TLEs is enhanced by pharmacological inhibition of cdc2. Taken together, these results demonstrate that Gro/TLE proteins are phosphorylated as a function of the cell cycle and implicate phosphorylation events occurring during mitosis in the negative regulation of Gro/TLE activity.