A critical regulatory element in many promoters transcribed by RNA polymerase II is the "TATA" box, which is located 25-30 nucleotides upstream of the transcription initiation site. TFIID is a biochemically defined HeLa cell nuclear fraction containing a transcription factor activity that binds specifically to the TATA box and is critical in determining both basal and regulated promoter activity. Recently, the gene for a TATA-binding protein was cloned and found to bind to various TATA elements and to substitute for TFIID in stimulating basal gene expression in in vitro transcription systems. However, it is possible that additional cellular factors can bind to the TATA element and influence the level of gene expression. By using lambda gt11 expression cloning with oligonucleotides corresponding to the human immunodeficiency virus 1 TATA element, we report the identification of a cellular protein with a calculated molecular mass of 123 kDa that we designate TATA element modulatory factor (TMF). TMF binds to the human immunodeficiency virus 1 TATA element in gel-retardation assays and inhibits activation of the viral long terminal repeat by the TATA-binding protein in in vitro transcription assays. TMF contains leucine-zipper amino acid motifs and exhibits homology in its DNA binding domain with the phage-encoded DNA binding protein Ner. Chromosomal mapping localizes the TMF gene to human chromosome 3p12-p21, which is a site of frequent rearrangements in lung and renal carcinomas. Thus, TMF is a transcription factor that likely regulates the expression of both viral and cellular genes.